An FNB branch in Johannesburg. Picture: REUTERS / SIPHIWE SIBEKO
An FNB branch in Johannesburg. Picture: REUTERS / SIPHIWE SIBEKO

FNB Life has the most satisfied policyholders, a customer satisfaction survey of clients of SA’s major life assurers shows. This is the second year in a row that the bank has come out tops and ahead of traditional life assurers in the SA Customer Satisfaction Index (SA-csi) for Life Insurance.

Bancassurance, which is the process of selling insurance products through banking channels, has been growing rapidly in SA, according to the SA-csi for Life Insurance.

Prof Adré Schreuder, the founder and chair of SA-csi, says the ability of banks to integrate life insurance into trusted and digitised banking systems as part of a more holistic financial services offering represents a competitive threat to traditional insurers. “Added to this, bancassurance products are typically simpler to understand, easy to access and sign up, and in many instances require no costly underwriting.”

While customer satisfaction is an important consideration when choosing a life assurer, beware of making it your only consideration, especially if you’re buying cover directly, without the help of a qualified financial adviser. 

A financial adviser will not only consider the reputation of any insurer that he or she recommends to you but will also look out for benefits you may need, exclusions on pre-existing conditions and how steeply your premiums will escalate in future. There may, for example, be a premium guarantee, which guarantees certain increases for a period — which can then be followed by steep escalations.

If you buy a policy with a premium guarantee and your health deteriorates over time, the premiums may be unaffordable when it is repriced. Finding another insurer could be difficult given your poorer state of health.  

All life assurers must adhere to the code of policy quotations, which compels them to disclose how premiums may increase at the end of a contract term or premium guarantee.

FNB has an extraordinary complaint-handling score of 75.6, leaps ahead of industry par and by global standards, a score above 50/100 is considered world-class.
SA-csi

Metropolitan took second place in the customer satisfaction survey, followed by Old Mutual, Sanlam, Absa Life, 1Life Insurance and Discovery Life.

“Liberty and Momentum follow below par and with a significant gap between their closest competitors. Both insurers have faced a three-year downward trend in customer satisfaction scores,” according to a media release issued by SA-csi.

Schreuder says one of the big takeouts from the research is that the industry needs to address the common misperception that insurers look for reasons not to pay claims.

“It’s a perception that’s not backed by the facts if you consider the Association for Savings & Investment SA statistics for long-term insurance claims made during 2018, showing that life insurers paid out R15.1bn in death benefits to beneficiaries and policyholders during the year — equivalent to 99.3% of the value of all claims made. 

“The percentage of claims that were repudiated or escalated to the ombud amounts to just 0.7%.”  

During the field research, SA-csi respondents mentioned “trust” and “delivering on promises” as their key satisfaction criteria — significantly ahead of cost, Schreuder says.

This points to the need for a new model of insurance underwriting and claims assessment that moves beyond mere compliance and legal protocols when it comes to customer complaints and experience, the SA-csi release says.  

Given that customer perceptions and reality are poles apart, “the time for insurers to do some introspection is overdue”, SA-csi says. “The question that must be addressed is whether claims rejections and complaints handling are done on grounds that are fair and reasonable to the customer, vs purely on a legalistic basis, and whether ... measures [are] in place to educate and inform customers.”

The release says that in terms of complaints incidence and handling, FNB has a complaint incidence score of 7.9%, which is lower than the industry average of 8.2%, and “an extraordinary complaint-handling score of 75.6, which is leaps ahead of industry par (45.7)”.  By global standards, a score above 50/100 is considered world class, SA-csi says.

The SA-csi for Life Insurance is a causal model that links customer expectations, perceived quality and perceived value to customer satisfaction (the SA-csi score), which in turn is linked to customer complaints (and recovery) and customer loyalty intentions.  

The SA-csi forms part of a global network of research groups, quality associations and universities that have adopted the methodology of the American Customer Satisfaction Index via its Global CSISM programme.