South Africa’s best and worst life insurers, according to customers

 ·10 Mar 2022

The latest South African Customer Satisfaction Index (SAcsi) for Life Insurance reveals which insurer has the most satisfied customers.

The group’s benchmark measurement for life insurance for 2021 gauges the levels of customer satisfaction of South Africa’s major life insurers – namely, 1Life Insurance, Absa Life, Discovery Life, FNB Life, Metropolitan, Old Mutual, Sanlam and Standard Bank Life Insurance.

The index surveyed over 2,100 customers of SA’s largest life insurers by market share during the last quarter of 2021.

With an index score of 84.9, Absa Life emerged as the market leader in 2021, followed by Metropolitan (84.6) and FNB Life (83.9).

Standard Bank Life Insurance, Old Mutual, Sanlam and 1Life Insurance are on par with the industry average (81.1), while Discovery Life performed below par. Despite Discovery’s lower position, it showed an improvement of more than 4 index points following a decline of three consecutive years. Consulta noted.

Absa Life, meanwhile, made significant strides to the top position, improving its overall Customer Satisfaction Score by more than 7-index points compared with last year’s score.

Insurer 2020 2021 Change
Absa Life 77.5 84.9 +7.4
Metropolitan 83.2 84.6 +1.4
FNB Life 81.7 83.9 +2.2
Standard Bank Life 82.4 82.7 +0.3
Old Mutual 78.9 82.5 +3.6
Industry Average 78.8 81.1 +2.3
Sanlam 79.7 80.4 +0.7
1Life Insurance 80.9 80.1 -0.8
Discovery Life 73.8 78.4 +4.6

“Two years into the pandemic, 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,” said CEO of Consulta, Abigail Boikhutso.

“If anything, our lived experiences of the last two years have 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.”

Boikhutso said that over the last two years, consumers have demanded simplicity, absolute clarity and transparency in terms of the conditions of cover, and have ditched overly complex and expensive rewards programmes that require high effort levels.

“[Consumers] have become increasingly intolerant of bad customer experiences and slow responses from service providers,” she said.

“From an engagement perspective, consumers expect to receive the same level of responsiveness of digital service integration as they do from their banks, and life insurers have been under immense pressure to bring their processes and systems into the mainstream of digitisation.”

The good news is that the latest SAcsi does show that insurers have made solid headway and that customer loyalty and satisfaction are on the up. “However, we still do see that the hangover of the reputational damage caused by highly publicised claims repudiations – whether in the life or short-term space is irrelevant – remain fairly front and centre for many consumers.

“Any hint of a blunder in respect of the trust and reliability of an insurer is likely to have a significant impact on customer loyalty, and in turn, the overall perception of satisfaction with the insurer. The coming months will demand that insurers become honed across every aspect of the customer journey – from product research, advice, purchase, admin and servicing to claims and renewals,” Boikhutso said.

Insurance complaints

Consulta’s research showed that complaint incidence across the life insurance industry increased to 13.1% in 2021, 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 had the lowest number of complaints (6.2%) by a significant margin and well below industry par (13.1%). Metropolitan had 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 in 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,” Consulta said.

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