The best and worst life insurers in South Africa in 2017

 ·3 May 2017

The latest South African Customer Satisfaction Index (SAcsi) for life insurance, conducted by Consulta, finds that South African life insurance customers are the most satisfied with Metropolitan Life’s products.

Now in its fifth year, the SAcsi Benchmark for Life Insurance offers insight into the South African life insurance industry, by blending a Customer Expectations Index, Perceived Quality Index and a Perceived Value Index to achieve an overall result out of 100.

South Africa’s top six insurers are included in the industry index: Metropolitan, Discovery, Old Mutual, Liberty, Momentum and Sanlam. The sample included 2,460 customers who were randomly selected for inclusion in the 2016 survey.

Metropolitan’s score of 82.6 places it well above the industry average of 79.0, the group said, adding that the company has consistently improved its score over the past three years, having climbed from 81.4 in 2015 and 74.0 in 2014.

Old Mutual scored 80.3 (up 2.3 points), while Liberty scored 78.1 (up 4 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, with a score of 74 points (down 1 point since 2015 and still below its 2014 score of 74.8).

# Life Insurer 2016 Score 2017 Score
1 Metropolitan 81.4 82.6
2 Old Mutual 78.0 80.3
Industry Average 77.3 79.0
3 Liberty 74.1 78.1
4 Sanlam 74.9 77.5
4 Momentum 79.3 77.5
6 Discovery 75.0 74.0

“In (life insurance) there isn’t a wide gap between the leaders and the laggards, compared to other industry benchmarks in the SAcsi,” said Consulta CEO, Professor Adré Schreuder.

“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.”

However, Schreuder said that 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.

“While Metropolitan customers prefer the in-branch, face-to-face experience and make enquiries more often, Discovery customers prefer to be served electronically online and via apps,” he said.

“Metropolitan customers believe that the insurer offers them the best product that meets their specific needs, and delivers on the promises made.”

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,” Schreuder said.

Read: The best and worst supermarkets in South Africa

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