Changed client perspectives could result in positive outcomes for advisers

The 2020 South African Customer Satisfaction Index for Life Insurance, conducted by Consulta, reveals a welcome change in consumer perspectives.

“COVID-19 has brought life insurance into the mainstream of consumer dialogue, and it is no longer viewed as simply a policy document, with little-understood terms and conditions, until the time of crisis when a loved one passes away or a life event alters income-generating capability. The pandemic seems to have narrowed the degrees of separation as the rising COVID death toll is reported daily. Whereas insurers traditionally had limited engagement points with policyholders, now daily ‘life questions’ such as whether taking or refusing the vaccine will impact employment contracts, or whether provision for loved ones is sufficient given current circumstances, has accelerated life insurance to top-of-mind by consumers.

Policyholders now expect the same instant responsiveness to their needs from their insurers as they do from the likes of retailers or banks. And banks, as the index has revealed, are doing better at this than the traditional insurers are according to consumers,” explains Ineke Prinsloo, Head of Customer Insights at Consulta.

“It is clear that the customer expectations of 2019 are not the same in the current environment, and fundamental shifts have taken place, both perceptually and in practice. From the customer perspective, the core product of insurance remains highly commoditised. While vaccines provide some hope that an end to the pandemic could be in sight, concerns over more waves and variants of the virus have made the value placed on life insurance more palpable – and commoditisation continuously misses consumer expectations.

What are clients looking for?

For consumers, the important differentiators are:

• the ease of doing business with the insurer or broker across omnichannel service channels
• the quality of such engagements and advice
• the speed and manner in which complaints and enquiries are handled
• whether the quality of the actual customer experience matches their perception of value derived versus price paid, and
• the reputation and ethos of the insurer when it comes to claims time

Any hint of a blunder in this regard is likely to have a significant impact on customer trust and loyalty, and in turn, the overall perception of satisfaction with the insurer,” Prinsloo adds.

This is certainly reflected in the outcome of the survey, with two big players taking some telling punches in the results.

What changed?

The past 18 months have clearly demonstrated that insurers need to evolve beyond simplistic insurance products and gross premium metrics to a holistic service orientation underpinned by digital innovation in product design and service channels.

“Customers experience exceptional service from many other industries which have rapidly pivoted to hybrid service delivery models. For many industries, notably the financial services sector, digitisation has delivered numerous unintended consequences.

The most significant of these is that while the intention was to deliver solutions in a digital format to ensure that customer needs are met and improve operational efficiency in an online world, the distance between customer and insurer has widened. Traditionally, insurance brands have been built on physical and market presence and physical engagements and advice delivered by brokers.

With digitisation, both insurers and brokers are much less visible in the lives of their customers as they navigate the digital hyperspace, and where their customers only engage with them when they choose to do so online.  The burning question facing insurers going forward, is what makes for a satisfied, loyal customer in a digital world, and how to rapidly evolve beyond legacy systems and traditional practices,” concludes Prinsloo.

What about advisers?

Whilst the Key take-outs from the SA-csi for Life Insurance 2020 reflect public perceptions of the top ten life offices, it also impacts on the ability of advisers to market their products. Negative market perceptions will obviously make it more difficult to sell a product.

A constant gripe from advisers is poor service from life offices which in turn leads to a poor reflection on the intermediary’s ability to service his/her clients.

Those product providers who conveniently use the amount of business generated by an adviser to determine the level of service to clients should heed the wake-up call in these findings.