Max Life to ICICI Pru Life, private insurance firms climb the loyalty curve

Customer loyalty towards life insurance companies is the highest amongst large well-established brands that are reliable, trustworthy, credibly deliver what they promise and are transparent while selling their products, finds a recent survey. The seventh round of the survey conducted by Kantar IMRB International, finds that loyalty is a function of the chain of human agents that it trains and deploys on the field. Despite the digital world encroaching upon the real world of insurance selling, it would seem that branding and customer confidence are still outside its realm.

Data for the survey was collected during the first quarter of the previous fiscal year, with over 7,000 customers participating from15 cities. The winners of the 2018 survey have been ranked in terms of customer loyalty index. Further, data on grievances and renewal premium revenue has been provided. The persistency ratio is a measure used to understand the likelihood of a customer paying his premium as soon as the first year of his policy is completed.

 
“Over the years we are seeing private players like SBI Life, HDFC Life and ICICI Prudential beginning to narrow the gap with Life Insurance Corporation of India (LIC), and in some cases surpass LIC too. Customer confidence in these brands is on the increase,” says the survey.
 
LIC, the survey finds, is losing out to private players because of the level and quality of innovation in products, customer service and technology. Even though LIC continues to have the strongest brand name, widest reach through network of branches, this is the second year in a row that private players have raced past on the loyalty score.
 
The core factor for a successful customer experience is the ability of life insurance companies to train the staff, agents, to service customers properly. From explaining complex jargon, to informing and educating the customer about payment schedules and claim procedures, the role of the agent is central to building customer loyalty. The survey says, “Inadequate training and agent attrition are the primary reasons for poor agent experience,” which is why some companies see dealing sales and lost market share.
 
New customers for example prefer the bank assurance model to being contacted/dealing with agents, as their local bank provides a range of other services and understands the customers’ personal needs. It is this level of familiarity and comfort that life insurance companies need to build and inculcate in their sales and customer-facing staff, to ensure that they stay in touch and learn about the customer throughout the life of the policy, the survey says. Not just focus on sales and ensure that renewal premium targets are met.
 

This year’s winner, is Max Life, which has jumped from sixth position last year, to the first position in this years’ survey. “Agents of this company appear to have a  big role in ensuring its leadership position too, outperforming the industry average on important parameters,” such as consistently staying in touch with customers, providing updates about their policy and also helping them purchase the best policy, according to the respondents to the survey.

In FY2018, the company paid 98.26 per cent of all individual policy claims, while the overall grievance incidence rate was 93 per 10000 policies. The number of complaints about policies came down from 172 to 93 between 2017 and 2018, while complaints on claims came down from 96 to 7.
 
Similarly, Bajaj Allianz Life, LIC and SBI Life have made strong improvements in reducing the number of complaints they receive. While Aditya Birla Life Insurance company and ICICI Prudential have the most number of complaints, out of the top six life insurance companies, ranked in terms of customer loyalty. The two private players saw their renewal premiums decline between FY2017 and FY2018, while the others witnessed a year-on-year rise in their renewal premiums.
 
The other companies in the survey (sequentially according to the survey’s 2018 loyalty ranking) are: Bajaj Allianz Life and Reliance Nippon Life (6), HDFC Life and Kotak Life (8), PNB MetLife (10), Bharti Axa (11), Aviva Life (12) and IDBI Federal Life (13).