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The Best and Worst Short-Term Insurance Companies From 2017

Author: Jason Snyman
Date: 2018-07-06
The South African Consumer Satisfaction Index for Short-Term Insurance Companies has revealed which insurers rose to the challenge in 2017.
The Ombudsman for Short-Term Insurance published its annual report for 2017 just a short while ago. The report revealed which insurers received the most complaints, as well as the specific types of insurance products complained about. The Ombud said that throughout the course of 2017, it finalised 9962 complaints. These were managed with an average turn-around time of 131 days. Furthermore, the Ombud took almost 80 000 calls and managed to recover up to R87.1 million for consumers. Unsurprisingly, the majority of complaints were levelled at the motor insurance sector, as this is commonly one of the most misunderstood and high-risk insurance sectors of them all. Complaints about motor insurance made up 48.3% - nearly half – of all complaints. 74% of those complaints were for accidental damage – but the complaints were mainly comprised of claims which were rejected on the grounds of the insured driving while under the influence of alcohol. It speaks volumes about the state of our roads and the nerve of our motorists. The second highest cause for complaints was for rejections based on the policyholder’s alleged misrepresentation of underwriting details in the early sales stage. Meaning, the people applying for insurance were lying about their credit history, lying about previous insurance claims, lying about who the regular driver of the vehicle was and also lying about security devices installed, where the car would be parked and whether the vehicle would be used for personal or business use. Again, this speaks volumes. So, the results of the latest South African Customer Satisfaction Index (SAcsi) for Short-Term Insurance Companies would no doubt be interesting. Let’s see what they found – who was the best short-term insurance company in 2017?  

How Are The Results Determined?

The SAcsi for Short-Term Insurance Companies is now in its sixth year. The report, conducted by Consulta, offers impartial insight into the short-term insurance industry by measuring a customer’s satisfaction. The 2017, 2789 short-term insurance customers were randomly selected to participate in the survey. Last year, we saw traditional insurance giants Santam, Discovery, Old Mutual and OUTsurance – joined by niche insurer Virseker – all fighting for top honours. The scores, out of 100, were based on a weighted average of customer satisfaction. It took the following facets into account:
  • The customer’s overall satisfaction with the product or service;
  • The degree to which the product or service has met, fallen short or exceeded customer expectations;
  • How well the product or service compares to the customer’s ideal product or service within this category.
Another metric used to measure the brand’s performance is the Net Promoter Score (NPS), which is designed to gauge the likelihood of a customer recommending the brand to the people they know. This is also compared to those customers who would actively discourage people from engaging with the brand. The industry average for NPS is currently 29.9%. In 2017, Santam achieved the highest NPS with 47.1%, Old Mutual 38.0% and Virseker 36.9%. Auto & General didn’t fair very well, with a below average NPS of 16.8%. Hollard scored 10.3%. The problems at Hollard and Auto & General become more apparent when looking at the amount of complaints they have received. The two insurers had the highest number of customers who reported complaints. Old Mutual, on the other hand, had the lowest amount of complaints, and also among the best complaint handling processes. The biggest challenges and complaints these insurers face revolve around pricing, response times and claims processes. The industry will need to do better, each and every year.  

The Best Short-Term Insurance Company 2017

Santam has led the charge for three consecutive years, and for the first time since 2014 we saw its SAcsi score drop. Santam stood at 81.3 in 2016, dropping only slightly to 80.2 last year. Old Mutual Insure, however, increased its score from 77.7 to 79.5. Likewise, OUTsurance rose from 77.3 to 79.3. With an amplified market share, Discovery Insure also did well, making a strong debut into the big brands category with a total of 79.5. Another big name, Auto & General, maintained the industry par with a score of 75.2. Hollard, however, dropped below standard with a paltry score of 71.5. CEO of Consulta, Professor Adré Schreuder, said:
"This is the first time since the inception of the Short-Term Insurance SAcsi in 2012, that we have seen such a closely contested race for the top position, and a most surprising new winner emerging."
That surprise winner, coming out as the top performing short-term insurance brand in South Africa last year, was Virseker. Virseker stunned the four larger companies, earning a top SAcsi score of 81.8.  

What Are They Doing Right?

Insurers are beginning to embrace technology, adapting to the evolved needs of the consumer. We’ve seen companies optimise customer engagement through innovation – utilizing the likes of apps and gamification to their advantage. Insurance companies now understand the immense importance of interacting with customers – in an easy, non-annoying way – and making it simpler for their clients to claim. Insurers are certainly trying – and we can see that in the overall SAcsi industry score which jumped from 75.8 in 2016 to 77.3 in 2017. Short-term insurers are striving to improve their products, improve their service and improve the customer’s experience.
“Margins in the industry continue to remain under pressure resulting in insurers constantly being challenged to find the balance between profitability and investing into business initiatives that will deliver real returns,” said Consulta’s Schreuder. “The results highlight the fact that insurers increasingly opt to invest into making their customers’ lives easier by focusing more on delivering customer experiences that meet and exceed expectations.”