Consulta has published its latest Consumer Satisfaction Index (SAcsi) for the short-term insurance industry, showing which insurers are the best at keeping their customers happy.
The survey assessed the overall level of satisfaction of customers from major South African short terms insurers including Auto & General, Discovery Insure, Hollard, OUTsurance, Old Mutual Insure, Santam and Virseker.
Consulta said that its survey data shows that traditional short-term insurers are facing tremendous pressure in a low growth market, “where customer expectations remain high by world standards, while loyalty is on the decline as a result of lower price tolerance”.
“Customers are not willing to pay more for their current offering,” it said.
The most notable finding is that smaller, niche insurers are giving large traditional short-term players real cause for concern when it comes to assessing who their true competition is.
Virseker takes the top spot in the ranking, with South Africa’s most satisfied clients for the second consecutive year. Virseker is a relatively small niche player catering for Afrikaans customers in their mother tongue.
Traditional insurance giants like Santam, Outsurance and Old Mutual Insure have remained relatively static compared with previous years. Hollard has shown consistent improvement in customer satisfaction scores over a three-year period, while Discovery Insure has shown a marked decline in its customer satisfaction score of almost 7 index points compared with 2017.
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According to Professor Adré Schreuder, SA-csi founder and chairperson, the strongest predictors of satisfaction in the insurance sector industry is the degree to which customers feel that their cover provides peace of mind and their provider keeps their promise.
“It all boils down to trust – and this is a significant factor when you consider that the nature of insurance is to protect your most valuable assets in your time of need, returning your financial stability after a mishap.
“It is very important that customers understand exactly what they are covered for during the sales and annual review process as this is where their expectations are born. The best way to achieve this is to drive simplicity in communication, remove jargon and provide sound advice.
“Customers want a provider that listens to them and responds to their individual needs. Insurers will go a long way to offer solutions that take into consideration individual client risks ratings where they are treated like individuals rather than policy numbers,” Schreuder said.
The Consulta head said that in an industry overrun with jargon and regulation, simplicity is key for the consumer.
“When customers have a clear understanding of what they are signing up for, there is a much lower chance that they will be disappointed at claims stage. Don’t expect clients to jump through hoops and expend a great deal of effort to get the cover they need.”
Customers complained most often about the cost of their cover (18%), claims handling (14%), terms of cover (11%), response time (9%) and feedback (9%).
In terms of complaints incidence and handling the industry average of complaints incidence is 14/100 and complaint handling is 49.8/100, which puts the industry on par with international standards in terms of how well issues are addressed.
Santam has a very low complaint incidence (8.5) which measures well against global standards – however the handling of complaints (and the subsequent impact on customer satisfaction) is below par (46.8).
While Virseker has a higher incidence of complaints at 17.4, their ability to handle and resolve the complaints for clients is very good at 60.3 which is significantly higher than the global gold standard of 50.
Both Virseker and Santam have made huge strides in improving their complaint handling scores compared with 2017, improving by 12.7 and 9.6 index points respectively.
Discovery had the highest incidence of complaints at 21.3 (more than double the global standard), and one of the lowest complaints handling scores at 45.7.