SA consumers’ satisfaction with the life insurance industry, declined for the second year in a row. According to the South African Customer Satisfaction Index (SAcsi) released today, life insurers were given a score of 75.7 out of 100. This is 2.7 points lower than the score recorded last year, which had declined on the previous year.
The survey involved a sample of 2 070 randomly selected customers of SA’s top life insurers by market share: Sanlam Life, Old Mutual, Momentum, Liberty Life, Discovery Life and Metropolitan Life and a category called ‘other’ which included smaller insurers. Sanlam and Momentum emerged as leaders with scores of 78.4 and 78.2 respectively. The scores of Old Mutual (77.5), Liberty Life (76.7), Discovery Life (74.8) and Metropolitan Life (74.0) were statistically on par with the industry average and the ‘other’ category scored below par in terms of overall customer satisfaction.
Prof. Adré Schreuder, founder of the SAcsi and CEO of Consulta Research, says that Momentum Life was the only brand which showed an improvement (+1.2) on last year’s customer satisfaction score while Sanlam and Old Mutual maintained their scores. The greatest decline in customer satisfaction was recorded by clients of Discovery Life (-3.3) followed by Metropolitan Life (-2.4) and Liberty Life (-1.8).
“Interestingly, both Discovery Life and Liberty Life have embarked on intensive communication and marketing campaigns. It is not unusual to see drops in satisfaction and customer loyalty following acquisition drives; the downward shift in their scores may be as a result of a lag between the brand promises made since last year, versus actual customer experiences. Put simply, brand promises drive up expectations amongst customers and these expectations need to be met,” says Prof. Schreuder.
Customer expectations are higher than last year for Momentum, Old Mutual and Sanlam customers. Metropolitan Life clients have the lowest expectations, which Prof. Schreuder says is likely a factor of the lower income segments that form part of its portfolio. The rest of the industry has reported no significant differences in expectation levels since last year.
Although the overall perceived value score declined slightly this year, Metropolitan Life customers are saying they are getting good value, with a score that is 2.5 points higher than a year ago. Momentum and Old Mutual also had improved value scores. “Discovery Life has seen a decline in its perceived value score. Of course price sensitivity plays a role and the life insurance industry is extremely price sensitive,” says Prof. Schreuder.
Perceived quality (whether insurers are meeting customers’ needs and whether they are seen as reliable) was higher for Metropolitan, Momentum and Old Mutual, whereas Discovery Life customers gave the brand a lower score than last year.
SAcsi also tracks the well known Net Promoter Score (NPS), which describes the likelihood of customers recommending a particular life insurer. “Although the overall score is 8% lower than last year, Old Mutual has the most promoters and the lowest detractors. Old Mutual and Sanlam customers were most likely to recommend these brands,” says Prof. Schreuder.
SAcsi is the only South African company to hold a license with the American Customer Satisfaction Index (ACSI). “This partnership allows the SAcsi to benchmark South African companies against international equivalents,” explains Schreuder.
The international life insurance industry benchmark is set by the USA at 83 out of 100. South Africa is currently at 75.7 and is often compared to countries like South Korea (74) and Singapore (66.1).