Which South African Insurer Has The Most Satisfied Customers?

Insurance
Insurance. Photo by Gabby K from Pexels

The latest South African Customer Satisfaction Index (SA-csi) for Life Insurance (2021) conducted by Consulta reveals how satisfied customers are with their life insurers over the last year.

The benchmark measurement for Life Insurance (2021) provides important insights into the levels of customer satisfaction of  South Africa’s major life insurers – 1Life Insurance, Absa Life, Discovery Life, FNB Life, Metropolitan, Old Mutual, Sanlam and Standard Bank Life Insurance.

The index surveyed over 2100 customers of SA’s largest life insurers by market share during the last quarter of 2021.

“Two years into the pandemic and it is clear that any excuses given for delivering a lousy customer experience due to the impact of COVID-19 on operations and customer service are moot.  This is very clear in the fact that Customer Expectations scores overall are at their highest across most industries covered by the SA-csi, but most notably in the financial services sectors,” explains Abigail Boikhutso, CEO of Consulta.

“The pandemic has not provided any reprieve from customer expectations – in fact the Customer Expectations score for the life insurance industry is at the highest it has ever been since the start of the SA-csi – at 84,5. If anything, our lived experiences of the last two years has sharply highlighted the importance and value of life insurance during uncertain times, and this has in turn driven up customer expectations of the performance of their life insurer, and their cover.”

Key take-outs from the SA-csi for Life Insurance 2021

Customer Satisfaction – Overall Index

  • In the 2021 SA-csi for Life Insurance, Absa Life (84,9), Metropolitan (84,6) and FNB Life (83,9) all take leader positions.
  • Standard Bank Life Insurance, Old Mutual, Sanlam and 1Life Insurance are on par (81,1).
  • While Discovery Life performs below par, it shows improvement of more than 4 index points following a decline of three consecutive years.
  • Absa Life made significant strides to the top leader position, improving its overall Customer Satisfaction Score by more than 7-index points compared with last year’s score.
  • Bancassurance – the distribution of insurance products through banking channels – continues to make inroads into the conventional life 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. 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.
  • Absa Life (87,0), FNB Life (86,9) and Metropolitan (87,9) all exceed the Customer Expectations par score (84,4).  Old Mutual (85,9), Sanlam (83,0) and Standard Bank (83,4) are  on par, while 1Life Insurance (81,8) and Discovery (82,5) were below par.  There is a significant upward trend of customer expectations across the industry, increasing from 82.0 in 2020 to 84.5 in 2021.
  • Discovery and 1Life Insurance perform below par on both Customer Expectations (84,5) and Perceived Quality (84,4) scores.
  • Metropolitan leads the way in meeting and exceeding Customer Expectations with a Perceived Quality score of 87,9, followed by Absa Life (87,0) and FNB Life (86,9).

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.  Effort levels have a significant impact on perceptions of value. Overly complex loyalty programmes that require high effort levels also impact on customer perceptions of value.
  • Absa Life (87,0), FNB Life (86,4), Metropolitan (86,4) and Old Mutual (84,3) take the lead on Perceived Value. Absa Life has shown significant improvement on this score of almost 7-index points compared with 2020.
  • Sanlam (80,9) and Standard Bank (84,0) perform on industry par for Perceived Value (82,6), while 1Life Insurance and Discovery are below par.

Complaints Incidence and Resolution

  • Complaint incidence across the industry increased to 13,1% widening the gap between the 10% recommended benchmark compared with 2020. The industry’s complaint handling is above the recommended 50 (53.4 out of 100), declining slightly from 50.8 achieved in 2020.
  • Standard Bank Life Insurance has the lowest number of complaints (6,2%) by a significant margin and well below industry par (13,1%).   Metropolitan (16,1%) has the highest Complaint Incidence – experiencing a significant uptick in complaint incidence from 9,8% in 2020 to 16,1% in 2021. All brands showed an increase on Complaint Incidence with the exception of Absa Life, FNB Life and Standard Bank Life Insurance.
  • Discovery (67,0), Metropolitan (64,2), FNB Life (61,6) and Standard Bank Life Insurance (59,6) recorded the best complaint handling scores, well above industry par (53,4).
  • Discovery has made significant improvement in its complaints handling score, improving to 67,0 in 2021 from 37,2 in 2020 – a 30-point improvement. Absa Life improved from 38,8 to 55,2 on complaints handling.  

Customer Loyalty

  • Retention and price tolerance are used to determine customer loyalty.
  • Absa Life (77,6%), FNB Life (75,6%), Metropolitan (75,6%), Standard Bank Life Insurance (75%) and 1Life Insurance (74,1%) have the most loyal customers and are above industry par (70,0%).
  • Discovery Life (70,9%), Old Mutual (70,8%) and Sanlam (69,1%) are on par.  

Net Promoter Score

  • Net Promoter Score measures the likelihood of a person recommending a brand.
  • Absa Life (57,9%), FNB Life (55%), Metropolitan (53,2%) and Standard Bank (51%) significantly outscore all other insurers and are well above industry average (41,7%). Old Mutual (46%) and 1Life Insurance (45,1%) are also above par.
  • Sanlam (39%) is on par.
  • Discovery (28,7%) is below par. Discovery has made significant improvement in its NPS score from 7,0% in 2020. Discovery has the highest numbers of detractors at 27% – detractors are unsatisfied customers who are less likely to recommend a brand and to speak negatively of it to family, friends and colleagues.
  • Absa Life (70%) has the highest number of promoters who actively recommend the brand to others, followed by FNB Life (69%), Standard Bank Life (68%) and Metropolitan (66%).

Treating Customers Fairly (TCF)

  • The degree to which customers feel they are being treated fairly by their insurer is highest with Absa Life (88.8), FNB Life (87,0), Metropolitan (87,0), Standard Bank Life Insurance (85,5), Old Mutual (85,1) and  1Life Insurance (84,1) – all above industry par (83,5).
  • Discovery Life (79,9) is below industry par.

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.

As a strategic tool for gauging the competitiveness of individual firms and predicting future profitability, an organisation’s customer satisfaction performance, as measured by the SA-csi methodology, provides a predictive indication of how well the firm will perform in terms of future revenue and earnings growth.

Supported by both the scientific and practitioner community, the SA-csi is the first independent, comprehensive national customer satisfaction index with international comparability in South Africa and has collected data from more than 500 000 consumers since its inception in 2012. The SA-csi forms part of a global network of research groups, quality associations and universities that have adopted the methodology of the American Customer Satisfaction Index (ACSI) via its Global CSI programme.

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