Negative publicity and bad press surrounding risk and life insurance has damaged consumer perception of the product, with satisfaction having decreased over the past year, Roy Morgan Research showed.
Roy Morgan's survey on risk and life insurance showed satisfaction among policy holders dipped from 69.3 per cent in 2015 to 67.5 per cent, but this was up from 66.3 per cent three years ago.
Roy Morgan industry communications director, Norman Morris, said while satisfaction remained higher than it was a decade ago, it was still lower than other major types of insurance measured by Roy Morgan, including motor vehicle, household, and private health insurance.
"Roy Morgan data shows that price is the major reason why risk and life insurance customers look around or change companies, with other reasons including a friend or adviser's recommendation, poor customer service, changed job, or change in family circumstances," Morris said.
Issues such as non-payment of benefits, inappropriate advice, complexity around policies linked to superannuation have dented the reputation of the sector, Morris said.
Most policy holders (96.8 per cent) said they would at least be ‘fairly likely' to renew their policy with their current company but only 35.3 per cent said they would be ‘extremely likely' to renew with the same company, indicating significant uncertainty.
Asteron Life had the highest satisfaction rate among the 13 largest risk and life insurers with 78.1 per cent, up 10.6 percentage points from last year, while AMP had the lowest satisfaction rate with 66.1 per cent.
Overall, only 24.3 per cent of policy holders were ‘very satisfied' with their policies, with CommInsure (22.5 per cent), and MLC (19.7 per cent) having the lowest levels of ‘very satisfied customers'.
But it was higher for Insuranceline (37.8 per cent) and Suncorp Insurance (32.2 per cent).
"In order to increase the likelihood of renewal, more attention needs to be given to boosting the proportion of ‘very satisfied' policy holders, who currently account for only 24.3 per cent," Morris said.