Insurance gripes rising

After two months of delay, Peter Williams went public. Photo / Janna Dixon

The insurance industry is defending itself against accusations of shoddy customer service amid a rise in the number of complaints upheld by the Insurance and Saving Ombudsman.

The independent investigator received 202 complaints for investigation in the 2007/08 financial year with 35 upheld, 11 partly upheld and 37 settled.

The previous year, the office received 201 complaints with 28 upheld, three partly upheld and 37 settled.

Almost two million insurance claims are made in New Zealand each year, says Insurance Council chief executive Chris Ryan, and most are dealt with successfully.

"It's a continual source of frustration for the industry that we deal with so many complaints," says Ryan.

"We get 98 per cent of them right and people get paid money - last year we paid out $2 billion for claims under insurance."

Customer service is something the industry "really works on", says Ryan, but the sheer volume of claims means "it's inevitable that there will be some people who feel service standards are not up to their expectation".

If a consumer experiences a delay in having a claim dealt with, Ryan insists there is usually a good reason. One is the increase in insurance fraud blamed on the recession, which means companies are more vigilant.

There is no specific complaints body relating to the service consumers receive from insurance companies, but they can complain to the Insurance Council if they think an insurer has breached the Fair Insurance Code. Ryan says the council receives about one complaint a month.

In the majority of complaints, the council finds in favour of the insurance company, says Ryan.

If a consumer is not satisfied with the decision, Ryan says the council encourages them to take their complaint to the media or to a lawyer. Most complaints are referred to the Insurance and Savings Ombudsman, which is free to consumers.

If someone feels a decision made by their insurance provider is unfair that person can complain to the ombudsman and the insurer is bound by its decision.

Often consumers are unhappy with their provider's response to a claim because of a lack of understanding of what they have signed up for, says Ryan. "One of the difficulties we have is that people don't often read the contract and they take out insurance for some of the things they value the most and they don't worry about the details."

Tower chief executive James Douglas says independent customer survey figures indicate satisfaction is at its highest level "for a number of years", and the majority of customers rate the company as "excellent for customer service".

AMI chief executive John Balmforth says the company has dedicated "customer advocates" to review complaints and make decisions. Balmforth says these concerns average about 35 per month, from 7.6 million interactions with customers a year.

State Insurance offers customers a complaints resolution process if they are unhappy with a decision. And State and AMI advise customers who are still unhappy to take their complaints to the ombudsman.

Delay and frustration

When One News presenter Peter Williams' bike was stolen in April, he thought claiming insurance would be fairly simple.

He reported the theft to police, got a copy of the receipt and told his insurance company. Two months later, he was at his wits' end. "I had one very early phone call but then nothing. I rang on three or four occasions and could never get through."

After "a couple of shitty emails" Tower promised him someone would get in touch, but nothing happened.

"Then I finally got through to someone a week ago, got particularly agitated, and they did something."

Williams talked about his story on Tuesday's Breakfast show, prompting a flood of viewer responses - and a call from a woman at Tower. "She apologised profusely and said 'we know our service is not all that good'. "

One call was from a man whose expensive photography gear was stolen from his car. A month later, his house was burgled.

"I keep ringing them [Tower] and only get the answering service," says the man. "I've stopped calling them now." He is now planning to dump Tower.

INSURANCE COMPLAINTS

2007/08

* 1680 complaint inquiries
* 202 complaints received for investigation
* 35 complaints upheld
* 11 complaints partly upheld
* 37 complaints settled
* 108 complaints not upheld

2006/07

* 1951 complaint inquiries
* 201 complaints received for investigation
* 28 complaints upheld
* 3 complaints partly upheld
* 37 complaints settled
* 141 complaints not upheld

Insurance and Saving Ombudsman