IconAccounting & Tax
IconAppraisers & Valuers
IconArbitration Services
IconAssessors & Loss Adjusters
IconAssist and Lifestyle Benefits
IconAssociations & Institutes
IconBBBEE Consulting and Verification Agencies
IconBroker Acquisition Financing
IconBrokers for Brokers
IconBusiness Process Management
IconCall Centre Outsourcing
IconCompany Secretarial Services
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDebit Order Collection Facilities
IconDefensive Driver Training
IconEducation and Training
IconEmergency Medical Rescue
IconFire, Storm, Flood Damage Specialists
IconHuman Resources
IconIndustrial Cleaners
IconInformation Technology and Software Partners
IconInsurance Companies
IconLightning Damage & Surge Protection Specialists
IconNiche Insurance Products
IconOutsourcing Companies
IconPremium Financing
IconPublic Loss Adjustors
IconRating Agencies
IconReference Books & Material
IconRegulatory Authorities
IconRisk Finance
IconRisk Management
IconRisk Surveyors
IconSalvage Operators
IconSpecialized Claims Investigations & Assessing
IconSurveys and Research
IconTraining Courses & Workshops
IconUnderwriting Managers
IconVehicle Accident Management
IconVehicle and Household Risk Inspection Services
IconVehicle Tracking
IconWellness Programs
IconWholesale Brokers
  Subscribe To »

Undesirable risk profiling - know your rights






"People freely talk about being 'blacklisted' by short-term insurance companies. Not only is there not such a thing, there is also a wrong perception about the real situation," says Steve Zietsman, Head of Marketing and Communication at Santam, SA's largest short-term insurer.

Zietsman says short-term insurance companies have a duty to manage their risks prudently and properly in order to keep their insurance premiums at an affordable level, in the interest of its clients.

In doing so, they have to deal with three matters:

  1. People exposed to unacceptably high risks
  2. People who are "moral risks". This is where a fraudulent activity was identified in a person's dealing with a specific company, either in underwriting or through the submission of a false claim
  3. Duplicate claims being submitted to more than one company (fraudulent claims)

It is not uncommon that an insurance company's exposure to risk becomes unacceptably high due to either the failure or the inability of a policyholder to keep risks within reasonable limits. When this happens we sometimes find it necessary to cancel such a policy, in which case the company is no longer prepared to extend the particular insurance cover to the client, given that person's circumstances.

"For instance, if a person has had a policy with us for 50 years, with minimal claims, and at the age of 70 starts becoming involved in two accidents every month. Although we will initially pay out, it becomes apparent that this person is now too high a risk - they shouldn't be driving a vehicle - and they may become uninsurable risks.

"Similarly, if a person lives in an area with high water levels resulting in frequent flooding of their home, or in a high crime area against which they are unable to provide sufficient security, they become a 'geographical risk' and may become uninsurable." However, emphasises Zietsman, should they move to a safer suburb, where flooding or robbery is less likely to occur, they will once again be able to obtain insurance.

Zietsman says even if a claimant has an excellent track record, if there is a sudden spate of claims, whether petty or large, this automatically rings alarm bells and we will investigate and cancel a policy if it is found that the risk is becoming unacceptably high.

The common perception that people who have had their policies cancelled are placed on a blacklist that is shared among other companies is altogether wrong. What is true, though, is that anyone has to disclose such information, should they be asked by another company whether they have previously had insurance cover terminated because of unacceptable risks. It is up to the other company to decide whether they are happy to accept such risk, and at what price.

A number of companies in the insurance industry also share in a common database of claims information. The aim is to identify possible duplicate claims (thus fraudulent conduct) and to safeguard honest clients from the unnecessary penalties that may result.

A company may also decide to cancel a policy on the basis of "moral risk" - where a fraudulent activity was identified in a person's dealing with the company, either in underwriting, or through the submission of a false claim.

"We constantly remind policyholders to take all precautions and care to prevent or minimise loss or damage to their possessions - if it is clear that this is not happening - it wouldn't make commercial sense for us to continue paying out claims which ultimately push up premiums for everyone else."

"If you work through a broker they will automatically take up an unjust cancellation with the insurer, however, if you do not work through a broker, you have every right to put your argument forward to the insurer directly or, alternatively, to contact the Insurance Ombudsman on 0860 726 890.

"The Ombudsman is an impartial mechanism through which the industry ensures policyholders receive fair treatment and service, and it provides a fast-acting, readily available port of call for disputes relating to claims without incurring costly legal fees", says Zietsman.

Source: Lange Strategic Communications
« Back to previous page Print this page » |

Breaking News »

Coface projections for 2016 Energy Market

By Coface, the Trade Credit Insurance Company   The energy sector has been hit by the fall in the oil price, down 59% between June 2014 and 24 September 2015 for a barrel of Brent. To overcome the fall ...
Read More »


2015 Christmas Sales Update

By Luke Doig, Senior Economist, Credit Guarantee Insurance Corporation   Our recent Christmas sales outlook forecast December 2015 retail sales to grow by 7. 4% in nominal terms and just 1% in real terms ...
Read More »


AIG announce Richie McCaw as global ambassador

New York: American International Group, Inc. (NYSE:AIG) today announced a three year deal with former All Black Richie McCaw to act as a global ambassador for the company. The contract deepens AIG’s connection ...
Read More »


Sustainability and strategic planning

By Jene’ Palmer (CGF Lead Independent Consultant)   Do you have your finger on the ‘pulse’ of your business? Is your organisation equipped to survive the pressures in a changing ...
Read More »


More News »


Healthcare »


Investment »


Life »


Retirement »


From The Glossary »


Surgery For Disease Of The Aorta:

The actual undergoing of surgery for a disease of the aorta needing excision and surgical replacements of the diseased aorta with a graft. For the purpose of this definition aorta shall mean the thoracic and abdominal aorta but not its branches. Traumatic injury of the aorta is excluded.
More Definitions »

By using this website you agree to the Terms of Use.
Copyright © Stoker Risk & ICT (Pty) Ltd 2004 - 2015.
All Rights Reserved.





Contact IG


Media Pack


RSS Feeds