Media release: 8 September 2021
Rise in accepted complaints, IFSO Scheme Annual Report
Karen Stevens, Insurance & Financial Services Ombudsman (IFSO), says most complaints this year were about insurance, with a 25% increase across Fire and General, Life and Health. She says the lift can be attributed to growing consumer awareness of the FMA’s focus on conduct and culture, as well as ICNZ’s Fair Insurance Code.
However, she says some complaint issues remain constant. “Consumers often don’t understand what the policy covers and how exclusions can cut out the cover they thought they had. People must carefully read what is on offer. This ensures the policy they are buying is the policy they need.”
Moreover, Karen says complaints often reflect a misunderstanding of insurance terms, especially sum insured, gradual damage and excess. “An understanding of these terms can impact your greatest assets – your home, contents or car. You could save future stress by always asking what the term means if you’re not sure.”
However, she says most providers are “quick to resolve and settle complaints when we contact them, which demonstrates a mature level of customer service. That’s good news for the consumers who contact us.”
It has been a year of change for the industry, says Karen, with COVID-19, climate change and increasing natural disasters, cyber-security threats and regulatory changes. “We are witnessing a sector that is having to respond quickly to many changes”.
After 26 years of operation, the IFSO Scheme has dealt with 70,081 cases and investigated 7,340 complaints. “After operating for that length of time, we have a wealth of knowledge that we share with industry to help them to improve customer outcomes and prevent complaints from arising,” says Karen.
The Annual Report includes real case studies - from COVID-19 affected travel, methamphetamine contamination, off-roading, funeral cover, irresponsible lending, and COVID-19 and redundancy. “All these cases contain important lessons for consumers to learn what to look out for and trouble spots to avoid,” says Karen.
The IFSO Scheme remains committed to providing a key service for New Zealand consumers. The IFSO Scheme dealt with 3,626 cases and increased complaint investigations to 334, as highlighted in its 2020-2021 Annual Report.
The top 5 issues were all about insurance, related to:
See the Annual Report here
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