The latest Customer Satisfaction Index (SA-csi) for Short-term Insurance conducted by the market research firm Consulta shows an industry where competition between players is fierce, with the difference in the customer satisfaction score between the top four scoring brands standing at barely more than a single index point.
The 2020 SA-csi for short term insurance polled 2,600 customers of short-term insurers during the second half of 2020 across the following brands:
While the index differentiates between direct and intermediated insurance models, it is important to note that all short-term insurers compete for the same customers regardless of their distribution models.
OUTsurance emerges as the leader in the Overall Customer Satisfaction index across direct and intermediated insurers. The company has shown consistent year-on-year improvement in its customer satisfaction score, from 2016 when it was well below par, to clinching leader position in 2020, Consulta said.
The scores of the seven insurers are:
| Rank | Insurer | 2020 | 2019 | Change |
| 1 | OUTsurance | 82.3 | 81.5 | +0.8 |
| 2 | Virseker | 81.7 | 83.2 | -1.5 |
| 3 | Old Mutual | 81.3 | 81.2 | +0.1 |
| 4 | Momentum | 81.2 | 77.8 | +3.4 |
| 5 | Santam | 79.5 | 79.7 | -0.2 |
| 6 | Discovery | 78.8 | 76.2 | +2.6 |
| 7 | Auto & General | 75.1 | 78.4 | -3.3 |
| Industry average | 79.9 | 80.0 | -0.1 |
Customer expectations increased across the industry during 2020. This is attributed to the increase in insurer brand messaging and heightened awareness due to extensive media coverage, notably around business interruption claims, and payment holidays that most insurers offered to financially distressed customers.
Ms Ineke Prinsloo, head of Customer Insights at Consulta, said, “On one hand, the industry achieved a great deal of goodwill by helping customers navigate the uncertainty that came with the arrival of COVID-19 and its impact on households and livelihoods.
“Payment holidays, premium discounts, and restructuring of client portfolios at a time when millions of South Africans found themselves in financial distress went a long way in shoring up loyalty and appreciation for the insurer interventions.
“On the opposite end of the spectrum, the damage wrought by declined business interruption claims and the ensuing public legal battles and media reporting raised the stakes in expectations. Customers questioned whether insurers could be trusted to pay in their time of need, and this was a prevailing theme.”
Consulta’s ancillary studies during 2020 also emphasised the increasing importance of ‘value’ to customers at a time when households were already and remain financially stretched. Of concern is the general increase in customer complaints across the industry and a commensurate decline in complaints handling and resolution. “Overall, the industry has some work to do on complaints management –a sentiment that is echoed by the office of the Ombudsman for Short-term Insurance.
What matters
Ms Prinsloo said, “The playing fields have been levelled in terms of product benefits, price, technology and loyalty programmes, and the space for contestation now sits firmly in customer experience. The insurers lagging on this critical measure will be forced out of the race as increasingly demanding insurance customers opt with their wallets.
“Legacy, brand sentimentality and track record will be secondary in a heavily contested space where there is very little growth –in this highly contested space, any new customer acquisition will come largely at the expense of a competitor.”
