The latest South African Customer Satisfaction Index (SA-csi) for life insurance has just been released. According to Consulta that conducted the research “insurers are heading into an environment where consumers will be under tremendous financial pressure and questioning the value proposition of all their financial planning solutions”.
“For at least the medium term, South Africa faces a heavily constrained economy, high and growing unemployment and technological disruption, all impacting the financial services sector and how it engages with customers. Customer mindsets, approaches to their financial planning products and providers are likely to undergo radical change in a post-Covid economy, as will all consumer discretionary spending. Brand loyalty will come under significant strain as customers scrutinise aspects such as perceived value for money, overall customer experience with their brands, and whether they trust their providers to pay out in their time of need. If markets were challenging before, they are about to enter unprecedented competition in a recycled and shrinking consumer pool that will demand laser-like focus by insurers on customer satisfaction if they are to keep churn rates in check,” Ineke Prinsloo, Head of Customer Insights at Consulta explains.
The benchmark measurement for Life Insurance (2019) provides important insights into the levels of customer satisfaction of South Africa’s major life insurers – Absa Life, Discovery Life, FNB Life, Liberty, Metropolitan, Momentum, Old Mutual and Sanlam – and will have a distinct bearing on how customers respond in an inevitably tough economy.
One of the key take outs of the measurement shows that big brands are struggling to meet customer expectations. Although most of the brands met or exceeded the industry standard, a few showed a slight decline. Absa Life, FNB Life and Old Mutual are leading the industry. It is interesting to note that two of the three leader positions are held by banks – Absa Life and FNB Life – and not traditional life insurers.
The research also highlighted that simplicity is key. When customers have a clear understanding of what they are signing up for, there is less chance that they will be disappointed when it comes to claiming. Furthermore, products need to be easy to understand and staff members and/or financial advisers should provide customers with frequent and relevant feedback during the process of interaction.
The degree to which customers feel they are being treated fairly by their insurer is highest with Absa Life (86,5), FNB Life (85,6), Metropolitan (83,5), Old Mutual (83,3) and Sanlam (82,4) – all above industry par of 81,9. Discovery Life (75.9), Liberty (77.7) and Momentum (77,7) are not on par with the rest of the industry.
|●||In terms of complaints incidence and handling, Absa Life has the lowest complaint incidence (6,2) which is well below the industry par (10,6) and it also has an exceptionally high complaint resolution rate (70,6). Liberty also performs well on this front, with a Complaint Incidence score of 9,2 and a solid Complaint Resolution rate of 63,2.|
|●||Both Absa Life and Liberty show massive improvements in their Complaint Handling scores, which suggests that this has been a key focus in the businesses since the 2018 index.|
|●||Discovery Life performs worst on this measure with a high complaint incidence rate of 10,8 and the lowest complaint resolution rate of 38,7 – both scores fall well short of the mark in terms of industry par, and both scores have shown significant decline when compared with 2018 scores.|
|●||Discovery Life and Sanlam all show a big increase in complaint incidence compared to their 2018 scores.|
Two thoughts to consider in view of the above:
|●||It may be well worth revisiting the six expected Treating Customers Fairly outcomes and measure yourself against this. A client’s experience, from start to finish, will be the measure of your success.|
|●||Product simplicity most certainly contributes to better understanding, and fewer complaints.|
Financial advisers are the face of customer experience and play a hugely important role in managing customer satisfaction. This needs to be backed up by sterling service to avoid the messenger being shot.
Click here to read more about the SA-csi results that also showcases customer expectations, net promoter score, perceived value and customer loyalty.