Consumers cooling on life/risk
At the same time as advisers worry about the future of life/risk beyond the Life Insurance Framework (LIF), the latest research from Roy Morgan has revealed that consumer satisfaction with life/risk insurance has also declined.
The latest Roy Morgan research has revealed that customer satisfaction with risk and life insurance fell to 64.6% in July, down from 65.6% a year earlier and 68.4% in 2018.
Roy Morgan’s analysis said that, at these levels life/risk insurance continued to have the lowest satisfaction of all major household and personal insurance types including general and health insurance.
According to the survey, Insuranceline emerged best in terms of consumer satisfaction with a rating of 78.9%, ahead of second placed Allianz (74.1%) and Zurich (71.8%).
“The three largest players in the industry experienced contrasting fortunes with both MLC and CommInsure scoring above average with MLC increasing their satisfaction rating by a significant 4.3% points to 67% and CommInsure up slightly by 0.5% points to 67.3%.”
“In contrast the AMP, which has seen a sharp decline in the number of policies over the last year since several scandals involving AMP were uncovered, scored 64.6% – exactly at the market average and barely changed on a year ago,” the Roy Morgan analysis said.
Commenting on the survey results, Roy Morgan chief executive, Michele Levine said they showed that although 86% or risk and life insurance policies were renewed automatically without shopping around, there was a risk associated with having below average satisfaction as this had the potential to discourage renewal and new clients.
She said the biggest increase in the purchasing channel used to purchase risk and life insurance over the last three years had been from an employer as part of superannuation, which had increased from 16.6% to 28%, while purchasing risk and life insurance online was another growing channel although it remained relatively small at 9% of purchases, showing only gradual growth from 7%.
“In addition, the use of insurance brokers and financial planners remains an important channel to purchase risk and life insurance which now accounts for around 17% of the market, but this is down from 21.3% three years ago,” Levine said.
“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.
“These results also indicate that fewer Australians are taking out risk and life insurance, 199,000 in the past year down from 236,000 three years ago. This is likely to lead to a smaller market over time if this trend continues.”
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