Absa in the lead on life insurance index
Absa Life has emerged as a leader in the latest South African Customer Satisfaction Index (SA-csi) for Life Insurance (2019).
The results of the annual research, which is conducted by Consulta, are published at a critical period for life insurers; against the backdrop of an economy crippled by the Covid-19 pandemic, constrained disposable incomes and customers’ increasing search for the best insurance value proposition.
“The onset of the Covid-19 pandemic and the resultant negative impact on the economy have raised the stakes,” said Dushen Naidoo, Managing Executive for Insurance at Absa Retail and Business Bank. “Customer satisfaction has become a key currency for insurers who aim to retain and grow market share. This achievement puts Absa Life at a firm advantage.”
Naidoo added: “The positive outcome augurs well for Absa’s strategy of growing closer to the customer and it reflects our persistence in this regard. This is evident in the consistently high customer satisfaction scores that the bank has maintained on the index over the past five years.”
According to the latest results, Absa Life leads with the highest scores on the customer satisfaction index overall. As Absa Life is a non-traditional life insurer, this feat highlights the increasing advantage of bancassurance – the process of selling insurance products through banking channels.
Ineke Prinsloo, head of customer insights at Consulta said, “This warrants attention given the ability of banks to integrate life insurance into trusted and digitised banking systems as part of a more holistic financial services offering, as well as integrate insurance offerings into their customer rewards programmes. This is likely to become increasingly important when customer cashflow is under pressure.”
In terms of the index, Absa Life led the three highest scorers with 83,2 on overall customer satisfaction.
Absa Life surpassed its peers on the score for perceived value, which is a measure of quality relative to price paid. This metric is a strong predictor of future usage and company growth. Effort levels influence the perception of value and therefore customers are most at risk of moving their cover should they consider the price too steep and the benefits not reflective of what they were promised.
The index also measures complaint incidences and the handling thereof. Absa Life achieved the lowest complaint incidence at 6.2% which outperforms the industry par of 10.6%. The insurer also has the highest complaint handling score of 70.6.
On the gamut of loyalty, Absa Life has the highest percentage of loyal customers. Respondents associated “being treated fairly by their insurer” with the Absa Life brand.
Absa Life’s net promoter score (NPS) of 54,2, which measures the likelihood of a person recommending a brand, was also the highest in the industry.
Internationally, Absa Life outperformed brand-level benchmarks of the largest brands in the US – SunTrust Bank, Chase, Citibank and Wells Fargo.
The Customer Satisfaction Index (SA-csi) is a weighted average of the facets of customer satisfaction with a product or service consisting of the overall satisfaction, the extent to which a service or product has met, exceeded or fallen short of expectations and a comparison of the product or service performance against the respondents’ idea of the ideal product or service.
Participants in the study included 1Life, Absa Life, Discovery Life, FNB Life, Liberty, Metropolitan, Momentum, Old Mutual and Sanlam.
For Absa, the journey to enhance customer satisfaction continues.
“As a caring service provider, Absa was an early adopter of measures to ease the burden of the lockdown on our customers through our comprehensive Payment Relief Programme. This was augmented by various other initiatives,” Naidoo said.
“In June, Absa’s Insurance Company reduced car insurance premiums of existing customers by 15% for two months. We have also reviewed retrenchment benefits linked to our credit life products to provide more comprehensive cover and we continue to assess our services to optimise value for our customers,” he added.