Most life insurance players in the country have not been able to meet customer expectations in terms of service offerings, says a survey. The improvements in customer experiences in the life insurance sector have come to a standstill, according to market research firm Hansa Research’s ‘Insurance CuES 2024’ survey.
The customer experience in the life insurance segment in India has been improving significantly since 2021, it said. However, according to the 2024 report, the industry’s ‘net promoter score’ has stagnated, remaining unchanged from 2023. In insurance, net promoter score refers to how likely a customer is to refer an insurer to someone.
The market research firm released its 4th annual edition of the survey that lists the top life insurance brands in India, basis their customer experience performance.
In the last two years, players like ICICI Prudential Life Insurance and Max Life Insurance have consolidated their positions with impressive NPS scores of 63 and 60 at the moment, the survey said, adding that customers perceive these brands as relatively more innovative and have consistently rated them higher on their products and plans, digital support, easy documentation and policy issuance time.
LIC also improved its customer experience after declining over the previous two years, primarily due to a disparity in digital experience, the survey report said.
“While brands like ICICI Prudential, Max Life, HDFC Life, Tata AIA and SBI Life have firmly cemented their place in the top 5, in terms of customer experience in the last couple of years. It is also concerning, that after a few years of improvements in the industry, most brands are failing to raise the bar further for customer experience,” said Praveen Nijhara, CEO, Hansa Research.
Life insurers are facing several challenges and opportunities as a result of India’s current demographic trends, which include the youth bulge and rising life expectancy as well as rapid urbanization and the income, cultural and linguistic divide, he said.
To meet consumer demand, insurers must innovate services, improve the current fragmented distribution strategy and create affordable and simple products that meet the diverse needs and financial capabilities of its customer base especially in markets that are expanding, according to Nijhara.
The study also highlighted the increasing brand awareness of private insurers among the uninsured customer segment. It also lays emphasis on the major barriers to customers’ life insurance purchasing decisions. These barriers are behavioral biases, affordability and perceived difficulty in purchase.
The uninsured customer segment in the non-metros seems to reflect higher price sensitivity citing affordability as a key barrier to a greater extent. They also believe that there are better alternative investment options and hence have not purchased Insurance, as per the survey.