Short-term insurers lose goodwill gains as customers struggle, new survey shows
Value for money and lack of perceived quality emerge as overriding themes in the latest satisfaction index conducted by Consulta
05 April 2022 - 19:42
byAndries Mahlangu
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The short-term insurance industry is facing increasingly discerning customers, signalling the extent to which their finances may be stretched due to rising inflation and interest rates.
The importance of value for money and lack of perceived quality or differentiation emerged as one of the overriding themes in the latest Customer Satisfaction Index conducted by Consulta.
Privately owned direct insurer Virseker and Momentum Metropolitan were the only two players on industry par in the overall customer satisfaction measure, Cosulta said on Tuesday after releasing the results of the 2021 survey.
“It certainly seems that any goodwill the industry built up in the initial stages of the pandemic in terms of payment holidays, premium discounts and restructuring of client portfolios at a time when millions of South Africans found themselves in financial distress are now moot,” Consulta CEO Abigail Boikhutso said in a statement.
“More consumers increasingly view insurance as a grudge purchase rather than an enabler and safety net, more so in the stressed economy.”
The survey polled just more than 3,600 customers of short-term insurers during the second half of 2021. The other intermediated insurers were Absa, Auto & General, Nedbank, Old Mutual Insure and Standard Bank.
As a tool for gauging the competitiveness of individual firms and predicting future profitability, an organisation’s customer satisfaction performance, as measured by the SA customer satisfaction index methodology, provides a predictive indication of how well the firm is likely to perform in terms of future revenue and earnings growth.
Boikhutso said the general increase in customer complaints across the industry and a commensurate decline in complaints handling and resolution was another concern the short-term industry needs to address.
“The playing field has been heavily slanted to price above all other measures, a very challenging space to play in. Legacy, brand sentimentality and track record are proving secondary in a heavily contested space where there is very little growth,” added Boikhutso.
The short-term industry has had mixed fortunes throughout the pandemic, with stricter lockdown restrictions leading to fewer car accident-related claims, but sparked a surge in business interruption-related claims.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Short-term insurers lose goodwill gains as customers struggle, new survey shows
Value for money and lack of perceived quality emerge as overriding themes in the latest satisfaction index conducted by Consulta
The short-term insurance industry is facing increasingly discerning customers, signalling the extent to which their finances may be stretched due to rising inflation and interest rates.
The importance of value for money and lack of perceived quality or differentiation emerged as one of the overriding themes in the latest Customer Satisfaction Index conducted by Consulta.
Privately owned direct insurer Virseker and Momentum Metropolitan were the only two players on industry par in the overall customer satisfaction measure, Cosulta said on Tuesday after releasing the results of the 2021 survey.
“It certainly seems that any goodwill the industry built up in the initial stages of the pandemic in terms of payment holidays, premium discounts and restructuring of client portfolios at a time when millions of South Africans found themselves in financial distress are now moot,” Consulta CEO Abigail Boikhutso said in a statement.
“More consumers increasingly view insurance as a grudge purchase rather than an enabler and safety net, more so in the stressed economy.”
The survey polled just more than 3,600 customers of short-term insurers during the second half of 2021. The other intermediated insurers were Absa, Auto & General, Nedbank, Old Mutual Insure and Standard Bank.
As a tool for gauging the competitiveness of individual firms and predicting future profitability, an organisation’s customer satisfaction performance, as measured by the SA customer satisfaction index methodology, provides a predictive indication of how well the firm is likely to perform in terms of future revenue and earnings growth.
Boikhutso said the general increase in customer complaints across the industry and a commensurate decline in complaints handling and resolution was another concern the short-term industry needs to address.
“The playing field has been heavily slanted to price above all other measures, a very challenging space to play in. Legacy, brand sentimentality and track record are proving secondary in a heavily contested space where there is very little growth,” added Boikhutso.
The short-term industry has had mixed fortunes throughout the pandemic, with stricter lockdown restrictions leading to fewer car accident-related claims, but sparked a surge in business interruption-related claims.
mahlangua@businesslive.co.za
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