South Africa’s best and worst insurers revealed

Customer satisfaction in the short-term insurance industry in South Africa showed a decline for the second year in a row.

According to the SA Customer Satisfaction Index (SAcsi), OUTSurance and Santam emerged as industry leaders, with Mutual & Federal following closely behind.

Over 3,160 customers were surveyed to evaluate their satisfaction with short-term insurance and data was collected between December 2014 and March 2015.

Brands included were Santam, OUTSurance, Mutual & Federal, Hollard and a category called “Other”.

The overall industry score declined 2.4 points to 76.4 out of 100.

Industry leaders were OUTSurance and Santam at 80.0 and 77.3 out of 100 respectively.

Mutual & Federal scored on par with the industry at 77.1 out of 100 and Hollard was rated as below par at 71.6 out of 100.

Company SAcsi Score
OUTsurance 80.0
Santam 77.3
Mutual & Federal 77.1
Industry Average 76.4
Hollard 71.6

“Tellingly, the lower overall score is linked to the fact that most brands aren’t meeting their customers’ expectations,” said Prof. Adré Schreuder, founder of SAcsi and CEO of Consulta Research.

“The short-term insurance industry is a low touch industry, meaning customers do not make contact with their providers on a regular basis. This means that the impact of complaints in the insurance industry is significant – a single complaint can have a big impact.”

Net Promoter Scores – the likelihood that customers would recommend a particular brand – showed a decrease of 7% for Hollard and an increase for OUTSurance of 8%. Consulta reports an anecdotal correlation between this score and its findings on social media platforms.

Customer loyalty is the result of two components: customer retention and price tolerance.  As such, the customer loyalty score reflects the impact of price tolerance on customer retention.

“Santam and Mutual & Federal show a significant decrease in customer loyalty and the overall industry loyalty follows the same trend,” Schreuder said.

The Ombudsman for Short-Term Insurance (OSTI) last month published its own report detailing South Africa’s best and worst short-term insurers.

Overall, the Ombudsman said it received 10,253 complaints in 2014, up 9.5% from 9,368 complaints in 2013, and from 9,144 complaints received five years ago.

The rand value of complaints resolved in favour of the insured was down to R116 million, from R119 million 2014, and R136 million in 2009.

Majority of complaints related to motor insurance at 46.9% (4,807 complaints), followed by houseowners’ insurance at 20.9% (2,148 complaints).  The “miscellaneous” category accounted for 17.4% of complaints.

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South Africa’s best and worst insurers revealed