Life insurance customer satisfaction remains a central focus for life insurance companies, yet the latest annual survey conducted by Hansa Research, known as “IInsurance CuES 2024,” highlights a concerning trend. This survey, utilizing the Net Promoter Score (NPS) metric to gauge customer satisfaction within the life insurance industry, indicates a stagnation in this critical area from 2023 to 2024.
Key Insights from the Life Insurance Customer Satisfaction Survey
- The NPS score for the industry, which had shown significant growth in previous years, remained static at 54 in 2024, following an increase from 38 in 2021 to 54 in 2023. This stagnation is attributed to a lack of brand differentiation and evolving customer expectations.
- Among the leading insurers, Max Life Insurance Company and ICICI Prudential achieved the highest scores due to their emphasis on user-friendly products, digital support, and streamlined documentation and policy issuance processes. HDFC Life, Tata AIA, and LIC also ranked in the top 5. LIC saw an improvement in its score after experiencing declines in the past two years, primarily due to enhancements in its digital offerings.
Key Findings in Life Insurance Customer Satisfaction
- Easily accessible and quickly available policy forms ranked as the primary criteria for customers when selecting a life insurance brand.
- 44% of policyholders had their claim requests rejected in the past year, with 27% unaware of the reasons for rejection. Medical reasons were cited as the primary cause for claim rejections.
- There is a growing recognition among customers regarding the role of life insurance as a tool for wealth accumulation.
- Brand awareness among uninsured customers, particularly in non-metro areas, is on the rise, with affordability being a significant barrier to purchasing life insurance.
- The top reasons cited by customers for not purchasing life insurance include behavioural biases/perceived need, affordability concerns, and the perceived complexity of purchasing life insurance products.
- Younger demographics (aged 25-35) prioritize brands that offer ease of purchase and prefer monthly payments via online channels.
- 30% of customers cited a lack of communication from insurers as a reason for discontinuing a policy, marking an 8% increase over the past year.
These insights underscore the evolving landscape of customer expectations and the imperative for life insurance companies to adapt their strategies to meet these changing demands effectively.