Key take-outs from the Consulta Life Insurance survey 2020

Why is this survey so important? The conclusionary note in the media release reads as follows:

The SA-csi for Life Insurance is the most comprehensive survey of customer satisfaction, and is a causal model that links customer expectations, perceived quality, and perceived value to customer satisfaction (the SA-csi score), which in turn is linked to customer complaints (and recovery), and customer loyalty intentions.

This survey is of course equally important for advisers who market the products of these companies.

So, how did they rank?

Customer Satisfaction – Overall Index

Company	Score	Par (78,8)	Ranking	Comment
Metropolitan	83,2	Above par	1	3-point improvement
Standard Bank	82,4	Above par	2	3-point improvement
FNB Life	81,7	Above par	3	Three year marginal decline
1Life Insurance	80,9	Above par	4
Sanlam	79.7	On par	5
Momentum	79.5	On par	6
Old Mutual	78,9	On par	7
Absa Life	77,5	On par	8
Discovery	73,8	Below par	9	Three year consecutive decline
Liberty	72,1	Below par	10	3-point decline

Interestingly, two of the four leader positions are held by banks – FNB Life and Standard Bank – and not traditional life insurers. Bancassurance continues to make inroads into the conventional insurer space.

Customer Expectations and Perceived Quality

Customer expectation is a measure of the customer’s anticipation of the quality of a company’s products or services, including some non-experiential information like advertising and word-of-mouth, and a forecast of the company’s ability to deliver quality in the future.

Perceived Quality is a measure of the customer’s evaluation via the recent experience of the quality of a company’s level of service and product delivery. In other words, the actual experience, as opposed to what was expected.

• All brands measured met or exceeded the expectations of customers, except for Discovery and Liberty.  These brands showed the most significant negative gaps of -3,7 and -4,4 respectively between Customer Expectations versus Perceived Quality. Both these brands come in below par on Customer Expectations and Perceived Quality scores.
• FNB Life leads the way in meeting and exceeding Customer Expectations with a score of 84,2 and a Perceived Quality score of 84,2. Standard Bank follows with 83,9 and 82,8 respectively, Momentum with 83,1 and 82,7 and Metropolitan with 83,0 and 82,4 respectively.

Perceived Value

The perceived value measures the quality relative to the price paid and is one of the most critical drivers of overall satisfaction when an industry is highly competitive.

• 1Life (83,5), FNB Life (85,2), Metropolitan (83,2) and Standard Bank (84,5) take the lead on Perceived Value. In particular, 1Life Insurance and Standard Bank have shown significant year-on-year improvement on this crucial score, while FNB Life shows a levelling out.
• Discovery Life (72,8) and Liberty (74,7) are well below industry par (79,7) with the former showing a year-on-year decline on this score. All other insurers perform on par.
• Interestingly, overly complex rewards/loyalty programmes that require high effort levels also impact on customer perceptions of value.

Complaints Incidence and Resolution

The industry recorded a slight decrease in complaint incidence and is only slightly above the 10% recommended benchmark. The industry’s complaint handling is above the recommended 50 (53.8 out of 100) benchmark, improving from the 50.4 achieved in 2019.

• Sanlam has the lowest number of complaints (7,0%) while Liberty (15,3%) customers complain the most and are well above industry par (10,2%). Liberty has shown a significant increase in complaint incidence from its score of 9,2% in 2019 and 8,9% in 2018.
• Sanlam (65,8) recorded the best complaint handling score way above industry par (53,8), followed by 1Life (55,2). Sanlam has made significant improvement in its complaints handling score from 47,4 in 2019.
• Liberty (37,2) and Discovery (37,2) have the lowest complaint handlings scores, well below industry par, and both show a decline in 2019 scores, with Liberty showing a big decline from 63,2 in 2019.
• Across the industry, issue related to customers’ policies were the most frequent complaint (20%), followed by fees and costs (10%) and debit orders (9,9%).

Customer Loyalty

Retention and price tolerance are used to determine customer loyalty.

• FNB Life (75,3%), 1Life (74%) and Metropolitan (74%) have the most loyal customers and are above industry average (68,4%), while Discovery Life (61,9%) and Liberty (62,3%) have the least loyal customers. The overall industry Loyalty Index (68,4%) has increased from 2019 (68,0%).

Net Promoter Score

Net Promoter Score (NPS) measures the likelihood of a person recommending a brand.

Company	Score (%)	Avg (%)	Ranking	Comment
Metropolitan	53.4	33.9	1
1Life Insurance	51.7	33.9	2
Standard Bank	43.8	33.9	3
FNB Life	43.6	33.9	4
Sanlam	40.0	33.9	5
Absa Life	35.5	33.9	6
Momentum	31.1	33.9	7
Old Mutual	29.8	33.9	8
Liberty	20.9	33.9	9
Discovery	7.0	33.9	10	Decline from 29,4 in 2018

Discovery took a significant decline from its 2018 score of 29,4% to 7,0% in 2020 and had one of the highest levels of detractors at 28%.  In the context of NPS, detractors are unsatisfied customers who are less likely to recommend a brand and to speak negatively of it to family, friends and colleagues.

Treating Customers Fairly (TCF)

• The degree to which customers feel they are being treated fairly by their insurer is highest with Metropolitan (86,5), 1Life Insurance (84,7), Standard Bank (82,9) and FNB Life (84,4) – all above industry par of 81,3.
• Discovery Life (75,1), Liberty (75,7) and Absa Life (79,3) are below industry par.