A fair shake?

However, is this the sign of an underlying problem, one which is building in momentum? On a scale of one to 10, ask yourself how consumers would likely rate the claims service of insurance companies. Based on my experiences with the public, my guess would be at the lower end of the scale. If you don’t believe me, then ask any 10 consumers on the street the same question — I think the response would be alarming.

Why then does the insurance industry sit back and ignore an obvious problem in the system, whether it has a real foundation or is simply a misconception in communication? I believe that the industry, faced with a more demanding and sophisticated consumer, could be at a crucial crossroads in winning consumer approval or distrust.

The concept of a middleman party to providing resolutions between businesses and the consumer is not new. However, the growing sophistication of business, particularly financial services, has required that the middleman process become more formal. Today in the insurance industry, like most of the other financial sectors, we have a provincial industry ombudsman to facilitate such a process. Actually, in the case of the Ontario insurance industry, it would be better to describe the person in question as the “ombudslady”.

In April of 1997, Lea Algar was appointed as the Ontario Insurance Ombudsman. CU’s October 1997 edition provided an overview article of the complaint procedure installed under the appointment of the Ombudsman. A year later, the Insurance Bureau of Canada (IBC) has commissioned an independent public opinion poll to gage consumer “claims satisfaction”. The results are currently being reviewed to be later published by Algar.

Having being personally involved with claims satisfaction surveys of the past, I feel that the questions presented in the latest survey could have been better focused on consumer issues. Given the opportunity, I would have put forward the following questions in the survey:

Did you ask your broker/agent for assistance with your insurance claim? Yes/No

Was the assistance Very helpful, Helpful, Not Helpful, No Action?

Was your adjuster a Staff, Independent, Telephone or unknown?

Did the adjuster have to explain the policy coverage? Yes/No

Were you Very Satisfied, Satisfied, Not Satisfied with the explanation?

Did the adjuster personally inspect the damage or conduct an interview? Yes/No

Did the adjuster present him/herself in a professional manner?

Was your claim denied? Yes/No

Were you Very satisfied, Satisfied, Not satisfied with your settlement?

Do you believe that you must answer these question positively or the insurance company may cancel your policy?

Would these questions generate more accurate statistics? Of course not, since statistics can be read to serve any purpose. Even 100 questions asked personally will not guarantee accurate results.

We are, however, working toward a better service system. And, as we stand with the current ombudsman system, we at least have the basis from which to build. For instance, procedures recently required by the Ontario ombudsman include each company appointing at least one claims expert as internal ombudsperson. These individuals are also listed on the Ontario’s industry ombudsman’s web-site.

Consumers are advised to write complaints to the same company which, in their opinion, was unfair in its dealings. Once the written submission has been reviewed by the company’s ombudsman and a response provided, the insured then has the option of writing to the Ontario industry ombudsman.

Can the Ombudsman request an amended settlement? No. Can the ombudsman request that the claim be covered ? No. So the consumer is left with the option of litigation if they are still not satisfied. For the consumer this may not be the ideal mechanism, but it is the best we have at hand.

I do believe, however, that we can improve the existing system by better communicating the complaints handling process. A brochure was recently sent out by the Ontario industry ombudsman titled “Working For You” outlining the complaints procedure. The problem is few consumers have been made aware of its existence, while not many insurance employees have seen it either.

Where is it available to the consumer? My suggestion is that the insured should receive a copy of the brochure with each policy/renewal document sent out. By doing so the industry just may be able to balance its books in customer relationships as well as retain policyholders who are more likely to be honest in their insurance dealings.