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Consumer Satisfaction With Life Insurance and Advice Declines

Consumer satisfaction with life insurance has dropped and remains lower than motor vehicle, household and private health insurance according to surveying conducted by Roy Morgan, which also found low levels of satisfaction among those who had received advice on life insurance.

The survey, which covered 50,000 consumers, including 9000 risk and life insurance policy holders, found that in the year to December 2016 more people were satisfied with their car, home and contents and private health insurance than with their life insurance.

According to Roy Morgan the number of people who were ‘fairly’ or ‘very’ satisfied with their life insurance fell from 68.8% in 2015 to 67.4% in 2016, behind comprehensive car insurance at 82.6%, household contents insurance at 80.3% and private health insurance ay 73.6%.

At the same time, consumers who purchased life insurance directly from an insurer stated they had higher levels of satisfaction than those who purchased it through an aligned adviser or through a non-aligned adviser.

“…consumers who purchased life insurance directly…had higher levels of satisfaction than those who purchased it through an aligned adviser…”

The survey found that 76.4% of holders of life insurance who purchased a product in person from an insurance company branch were ‘fairly’ or ‘very’ satisfied with similar levels recorded for those who purchased online (74.9%) or by telephone (71.9%).

Satisfaction levels for insurance purchased via an adviser working for a financial institution was 64.6%, ahead of satisfaction levels for insurance purchased through superannuation (64.1%) but below that of a direct purchase from a bank or insurer (68.7%). Life insurance purchased through a non-aligned adviser satisfied the lowest proportion of customers, at only 58.4%.

Roy Morgan Research Industry Communications Director, Norman Morris said the life insurance sector continued to suffer from negative publicity including recent concerns by ASIC regarding poor practices in the industry and the need for increased scrutiny.

“Given all this negative publicity, it is not surprising that satisfaction with risk and life has decreased over the past year and remains lower than the other major types of insurance that Roy Morgan measures, including motor vehicle, household and private health insurance,” Morris said.