The COVID-19 pandemic has accelerated the digitisation of South Africa’s insurance industry and created an evolving shift in consumer behaviour patterns and expectations. The industry has seen a significant increase in claims across most products and segments and there have been major fluctuations in the volumes of new business over this period.
It is against this challenging and disruptive backdrop that the 2021 South African Insurance Sentiment Index, conducted by PwC South Africa in collaboration with DataEQ, offers insight into consumer sentiment towards 15 of the country’s major insurers. The index tracked over 450,000 public non-enterprise posts on social media platforms between 1 April 2020 and 31 March 2021.
The data is based on unsolicited feedback from consumers – customers and non-customers alike – which offers a distinctive view of what people perceive about insurers and where they tend to fall short.
The insurance sector outperformed other industries
A Net Sentiment comparison across a broad range of industries saw South Africa’s insurance sector emerge as the industry with the lowest level of negative conversation among consumers. With an average Net Sentiment score of -0.4%, the insurance industry was followed closely by retail (-1.0%), but significantly outperformed both the banking (-16.3%) and telecoms (-34.6%) industries.
But customer service arose as a key issue
Complaints about turnaround time were seen across all insurance products, brands, and channels, and along all customer journey points, making up 52,8% of negative conversation. Interestingly, turnaround time was also among the top three drivers of positive conversation (21.5%), showing that it can make or break customer experience.
Other topics driving negative conversation were no response received (23.9%) and speaking to multiple contacts (16.5%), which highlights customer communications as an area that insurers should consider improving.
The overall claims process across the industry was rated -64.3% in terms of Net Sentiment, driven primarily by customers’ complaints about not knowing the status of their claim.
“The rising level of digital engagement presents an opportunity for insurers to leverage new insights on social sentiment, consumption habits, and trends to personalise their approach. In addition, an increased dependency on digital channels offers a solution to capacity constraints on traditional channels, allowing insurers to repurpose staff for higher-value activities and reduce the cost to serve,” said Riaan Singh, Digital Transformation Leader for PwC South Africa.
Does this pose a market conduct risk?
The need to improve customer outcomes and ensure fair treatment is a matter of regulatory compliance and insurers must be able to prove that they are indeed putting the customer first across their journey. As the financial services sector prepares for full implementation of the Twin Peaks framework, the proposed Conduct of Financial Institutions (COFI) Bill looks to ensure that the six Treating Customers Fairly (TCF) principles are legally binding and enforced.
Over two-thirds (67.8%) of the priority complaints directed at insurers related to one or more of the TCF framework outcomes. The bulk of these complaints (60.5%) spoke to Outcome 5: Performance and Service, highlighting that customer experience is a common complaint among consumers.
“Improved responsiveness to customer mentions on social media would not only boost consumer sentiment, but also assist insurers in reducing the conduct risk they’ll face when the TCF framework is fully implemented,” comments DataEQ’s Chief Executive, Nic Ray.
“Given this scenario, insurers would do well to pay close attention to their online conversation and ensure they are equipped to identify through all the noise, the priority conversation that requires attention and action. Doing this not only improves outcomes for consumers, but also mitigates reputational risk while ensuring regulatory compliance,” Ray concludes.
King Price obtains highest Net Sentiment
Of the 15 insurance providers included in the index, King Price obtained the highest Net Sentiment of 44.3% with their staff being praised for their competency and conduct when dealing with customers online.