South Africa’s best and worst life insurance providers, according to customers

The latest South African Customer Satisfaction Index (SAcsi) for Life Insurance reveals which insurer has the most satisfied customers.

Covid-19 has left in its wake a combination of altered life expectancy and forced migration to digital integration in virtually every aspect of daily living, irrevocably changing customer expectations of every service provider and brand they engage with. Insurance is no exception, said Consulta, the authors of the report.

The benchmark measurement for Life Insurance (2020) provides important insights into the levels of customer satisfaction of South Africa’s major life insurers – 1Life Insurance, Absa Life, Discovery Life, FNB Life, Liberty, Metropolitan, Momentum, Old Mutual, Sanlam and Standard Bank.

Covid-19, Consulta noted, has brought life insurance into the mainstream of consumer dialogue, and it is no longer viewed as simply a policy document, with little-understood terms and conditions, until the time of crisis when a loved one passes away or a life event alters income-generating capability.

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, said Ineke Prinsloo, head of customer insights at Consulta.

“While vaccines provide some hope that an end to the pandemic could be in sight, concerns over more waves and variants of the virus have made the value placed on life insurance more palpable – and commoditisation continuously misses consumer expectations.

“For consumers, the important differentiators are the ease of doing business with the insurer or broker across omnichannel service channels and the quality of such engagements and advice, the speed and manner in which complaints and enquiries are handled, whether the quality of the actual customer experience matches their perception of value derived versus price paid, and finally, the reputation and ethos of the insurer when it comes to claims time.”

The past 18 months have demonstrated that insurers need to evolve beyond simplistic insurance products and gross premium metrics to a holistic service orientation underpinned by digital innovation in product design and service channels.

In the 2020 SAcsi for Life Insurance, Metropolitan (83.2), Standard Bank (82.4), FNB Life (81.7) and 1Life Insurance (80.9), all take leadership positions and perform above industry par (78.8).

FNB Life, however, is showing a three-year marginal decline in overall customer satisfaction score and will do well to identify and address the root cause of the decline, said Consulta.

1Life Insurance, Metropolitan and Standard Bank all show significant improvement in previous 2019 overall customer satisfaction scores, with at least a 3-point improvement in previous scores.

Absa Life (77.5), Momentum (79.5), Old Mutual (78.9) and Sanlam (79.7) are on par.

Discovery Life (73,8) and Liberty (72,1) come in significantly below par (78,8) on overall customer satisfaction scores, the report showed. Discovery shows a three-year consecutive decline in its customer satisfaction score, while Liberty slips back with an almost 3-point decline after showing some improvement in its 2019 score.

Both insurers have dropped to their lowest scores since 2016, Consulta said.

It noted that two of the four leadership positions are held by banks – FNB Life and Standard Bank – and not traditional life insurers. Bancassurance – the distribution of insurance products through a customer’s established and trusted banking channels – continues to make inroads into the conventional insurer space.

Customer expectations

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, which means that perceived quality did not meet customer expectations.

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, Consulta said. Standard Bank follows with 83.9 and 82.8 respectively, Momentum with 83.1 and 82.7 and Metropolitan with 83 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, Consulta said.

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, according to the report.

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.

Complaints incidence and resolution

The industry recorded a slight decrease in complaint incidence and is only slightly above the 10% recommended benchmark.

Sanlam has the lowest number of complaints (7%) 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, Consulta said.

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, the report showed.

Across the industry, issues related to customers’ policies were the most frequent complaint (20%), followed by fees and costs (10%) and debit orders (9.9%).

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.


Read: The best insurance companies in South Africa

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