Survey: Customer satisfaction is what differentiates life cover providers

Metropolitan’s score of 82.6, saw it finish ahead of Old Mutual with 80.3 (up 2.3 points), while Liberty scored 78.1 (up four points), Sanlam and Momentum were on par with the industry at 77.5 points each (up 2.6 and down 1.8 respectively). Discovery was the only company to score below the industry average of 79, with a score of 74 points (down one point since 2015 and still below its 2014 score of 74.8).

Professor Adré Schreuder, CEO: Consulta

“In this category, there isn’t a wide gap between the leaders and the laggards, compared to other industry benchmarks in the SAcsi. In other sectors such as short term insurance, medical insurance and retail banking, the difference in satisfaction is much more varied as customers deal with the services more frequently and would be more cognisant of poor customer service.,” says Consulta CEO, Professor Adré Schreuder.

The sample included 2,460 customers who were randomly selected for inclusion in the 2016 survey.

Service quality

Still, there has been a consistent improvement in the service quality of companies such as Metropolitan and Old Mutual, leading to their high scores. Discovery, on the other hand, fell short in both perceived quality and value, leading to it falling short on meeting demanding customer expectations.

Loyalty

The average customer loyalty across the industry recovered slightly with a score of 69.5, having dipped to 67.6 in 2015 from a high of 73.6 in 2014. The current economic climate has placed pressure on South African households, and therefore some insurers are predicting an increase in policy cancellations. However, those who remained have a low price-increase tolerance of 66.3, meaning they may cancel their policies should there be any increases in cost relative to value.

Metropolitan enjoyed the highest customer loyalty score of 72.9, an increase from 68.5 in 2015. Momentum’s loyalty score was in line with the industry at 69.6, while Old Mutual and Sanlam each scored 68, followed by Liberty with a score 67.7 and Discovery with a score of 64.5.

“It was interesting to see that while Metropolitan’s number of complaints is above the industry average, it also had the best complaint handling. They turned the tide of criticism into an opportunity to show customers that they care about them,” says Schreuder.

Net promoter score

An important metric for insurance providers is the net promoter score (NPS), which measures the likelihood that customers will recommend a brand to their family and friends, becoming promoters, compared to customers who would actively discourage a relationship with an insurer, known as detractors.

Metropolitan achieved the highest NPS score of 46%, which beat the industry average by 8.6 points. Old Mutual scored 36%, Sanlam scored 33%, while Liberty and Momentum scored 30%. Discovery scored a NPS of 24%.

Metropolitan is the only brand to have consistently increased its NPS since 2014, having seen a massive jump from 34% in 2015.

Treating customers fairly

In anticipation of pending regulatory changes, life insurers were measured against the six principles of the Treating Customers Fairly (TCF) code, elements of which are included in the Twin Peaks legislation. Expected to come into effect mid-2017, TCF is a regulatory framework intended to improve market conduct in financial services. The score measures the perception of customer on how well financial services providers have incorporated TCF outcomes and a more customer-centric approach into their value propositions.

For the past five years, the SAcsi has shown a significant statistical correlation in perceived fairness and customer satisfaction. Metropolitan was the highest performer in this metric, with a TCF score of 85.8 compared to an industry average score of 81.1, while Discovery yielded the lowest TCF score of 76.

“There is very little differentiation (at least not sustainable) in the type of life cover offered by the each of the life insurers. The difference lies in the quality of customer experience and the level of engagement each brand provides,” concludes Schreuder.