Satisfaction With Life Insurance Falls Again

Consumer satisfaction with life insurance has declined marginally in the past 12 months but has fallen below that of any other major household or personal insurance, according to data released by Roy Morgan Research.

The research, which covered more than 10,000 risk and life insurance policy holders found that overall satisfaction with risk and life insurance, for the year to September 2017, had fallen slightly to 65.4 per cent from 66.4 per cent in 2017.

The decline, which has continued from a previous high of 69.5 per cent in 2015, placed risk and life insurance behind all major household and personal insurance types, including general and health insurance, in regards to customer satisfaction.

Despite this, some insurers were viewed favourably by consumers and had higher satisfaction ratings than in 2017, including Suncorp Insurance (up 8.6 per centage points), Asteron (up 6.5 per centage points) and Zurich (up 6.2 per centage points) compared with Westpac (down 10.3 percentage points) and AIA Australia and TAL (all down around 4.4 per centage points).

Insuranceline held the highest customer satisfaction numbers at 81.6 per cent up 4 per cent from a year ago, followed by Suncorp Insurance (78.7 per cent) and Real Insurance (74.7 per cent), all of which were above the average satisfaction level of 65.4 per cent.

The decline…placed risk and life insurance behind all major household and personal insurance types…in regards to customer satisfaction.

The market leaders in terms of number of policies issues – AMP and MLC, both fell below the average satisfaction level with a 64.3 per cent and 64.9 per cent customer satisfaction level, respectively.

The research firm stated that while 86 per cent of risk and life insurance policies were renewed automatically without shopping around, a below average satisfaction rating had the potential to discourage renewal and new clients.

As the likelihood of renewing with the same company declines, we see that this is associated with much lower satisfaction levels. Among policy holders who are unlikely to renew with the same company only around a quarter (25.6 per cent) are satisfied with their current insurer, compared to 66.9 per cent satisfaction among those who are at lease fairly likely to renew,” the researcher noted.

Roy Morgan Research Industry Communications Director, Norman Morris said the channel used by consumers to purchase their cover may impact their levels of satisfaction and retention by an insurer.

“The most frequent method used to purchase this type of insurance is still directly from an insurance company with 36 per cent, which has been falling over the last three years from 42 per cent in 2015,” Morris said, adding most consumers purchased cover over the telephone.

“Purchasing this type of insurance online is relatively small with 9.3 per cent, having only shown gradual growth from 6.7 per cent over recent years. The biggest increase in the purchasing channel used over the last three years has been from employer as part of superannuation, which has increased from 16.3 per cent to 26.5 per cent,” he said, adding the use of advisers accounted for 17 per cent of the market, down from 21.8 per cent three years ago.

“The use of these third parties to purchase risk and life insurance has the potential to take the customer relationship away from insurance companies and as a result they are likely to have less control over satisfaction and retention levels.”

  • Jeremy Wright

    I hate to burst the research Companies bubble, but this type of research around how consumers purchase Life Insurance and satisfaction levels, has little relevance to the end result, when a client needs to act at the the most important time, which is claim time.

    This same research, would have a very different result if the questions related to claims experience comparing Direct, Group, Industry and Retail advised Life Insurance was the focus.

    People will always rate a Company highly if the process of attaining Life Insurance is quick, easy and appears to be inexpensive.

    Only people who have needed to claim, are qualified to answer a satisfaction survey, as that is the “Coal Face” time of action, where the policy and the actions of the entity truly comes into play and until that claim occurs, very few people think more than a few seconds about how good their Life policies are..

    The one thing about surveys, is you can make anything seem attractive, so long as the questions point the participants towards the result you want.