Metropolitan tops in satisfying policyholders - index
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LIFE insurance company Metropolitan came out on top of the South African Customer Satisfaction Index for Life Insurance released yesterday, with Liberty and Discovery scoring their lowest scores since 2016.
The index, conducted by Consulta, provides insights into the levels of customer satisfaction with South Africa’s major life insurers: 1Life Insurance, Absa Life, Discovery Life, FNB Life, Liberty, Metropolitan, Momentum, Old Mutual, Sanlam and Standard Bank.
The model links customer expectations, perceived quality and perceived value to customer satisfaction, which, in turn, is linked to customer complaints, and recovery, as well as customer loyalty intentions.
Metropolitan scored 83.2 points, Standard Bank 82.4, FNB Life 81.7 and 1Life Insurance 80.9, scoring above the industry par of 78.8 points.
Absa Life scored 77.5 points, Momentum 79.5 points, Old Mutual 78.9 points and Sanlam at 79.7 points – putting them on par.
Although FNB Life did well in the index, the report found that the insurer had a three-year marginal decline in its overall customer satisfaction score, which required it to identify and address the root cause of the decline.
1Life Insurance, Metropolitan and Standard Bank all showed a significant improvement from their 2019 overall customer satisfaction scores, with at least a three-point improvement from their previous scores to put them in leading positions.
Discovery Life at 73.8 points and Liberty at 72.1 points were significantly below the 78.8-point par in overall customer satisfaction scores.
Discovery showed a three-year consecutive decline on its customer satisfaction score, while Liberty slipped back with an almost three-point decline after showing some improvement in its 2019 score. Both insurers have dropped to their lowest customer satisfaction scores since 2016.
Ineke Prinsloo, the head of customer insights at Consulta, said the Covid-19 pandemic had brought life insurance into the mainstream of consumer dialogue.
“The pandemic seemed to have narrowed the degrees of separation as the rising Covid death toll is reported daily. Whereas insurers traditionally had limited engagement points with policyholders, now daily ‘life questions’, such as whether taking or refusing the vaccine will impact employment contracts, or whether provision for loved ones is sufficient given current circumstances, has accelerated life insurance to top-of-mind by consumers.
“Policyholders now expect the same instant responsiveness to their needs from their insurers as they do from the likes of retailers or banks. And banks, as the index has revealed, are doing better at this than the traditional insurers are, according to consumers,” said Prinsloo.
She said it was clear that the customer expectations of 2019 were not the same as those in the current environment, and fundamental shifts had taken place, both perceptually and in practice.
“In the index’s sub-category of customer expectation, a measure of the customer’s anticipation of the quality of a company’s products or services, all brands measured met or exceeded the expectations of customers, except for Discovery and Liberty,” the report found.
The industry recorded a slight decrease in complaint incidence, which was only slightly above the recommended benchmark of 10 percent. The industry’s complaint handling was above the recommended benchmark of 50 points – at 53.8 out of 100 – an improvement from the 50.4 points achieved in 2019.
The index noted that Sanlam had the lowest number of complaints (7 percent), while Liberty (15.3 percent) customers complained the most and were well above industry par (10.2 percent). Liberty had shown a significant increase in complaint incidence from 9.2 percent in 2019 and 8.9 percent in 2018.
Sanlam, at 65.8 points, had the best complaint-handling score, far above the industry par of 53.8 points, followed by 1Life at 55.2 points. Sanlam has made significant improvement in its complaint-handling score from 47.4 points in 2019.
Meanwhile, Liberty (37.2 points) and Discovery (37.2 points) had the lowest complaint-handling scores, well below the industry par, and both showed a decline from their 2019 scores, with Liberty showing a big decline from 63.2 points in 2019, the index noted.
Across the industry, issues related to customers’ policies were the most frequent complaint at 20 percent, followed by fees and costs at 10 percent, and debit orders at 9.9 percent.