Satisfaction down for life insurance, annuity customers, says JD Power

0

It turns out that consumers’ love affair with longer-term individual life insurance and annuity products during the pandemic was short-lived.

According to a new study published by JD Power, customers regret purchasing the products soon after, which negatively influenced their opinion on the purchase of other insurance and financial services products. There is also a general lack of understanding of the products customers own, the study notes.

“After a brief spurt at the height of the pandemic, overall customer satisfaction with individual life insurance and annuity plans has now returned to its prior long-term trends in which customer satisfaction declines to as the length of product use increases,” Robert M. Lajdziak, director of global insurance intelligence at JD Power, said in a statement.

The study noted that the products saw their biggest year-on-year increase in 2021, but this year overall satisfaction with individual life insurance fell two points to 774 (on a scale of 1000 dots). Customers cited interaction with agents/advisors, call centers and websites as the areas of greatest dissatisfaction. Satisfaction with individual annuities fell 13 points to 789, driven by a sharp decline in satisfaction with prices, product offerings and communications.

The study also found that the longer a customer keeps a life insurance policy, the more they regret owning it. The overall satisfaction score for customers with a tenure of five years or less is 821. This score drops to 785 after six years, 759 after 11 years and 756 after 20 years. “Long-term clients are also significantly less likely to find that their agent or advisor meets the KPI of making recommendations in the best interest of the client,” the study notes.

Lajdziak said the data clearly shows that insurers are struggling to maintain regular contact with customers. “This not only limits potential future sales opportunities, but also exposes incumbents to the competitive threat of insurtech startups that are leveraging digital to deliver a more multi-channel approach to customer engagement that resonates with customers,” he said. -he declares.

The study also found that annuity providers underuse mobile apps to communicate with customers. Three quarters of their customers receive communications by mail, even though it is the channel with the lowest level of overall satisfaction, according to the study. Mobile apps, which generate the highest levels of customer satisfaction, are only used 8% of the time.

When it comes to providers with the most satisfied customers for individual life insurance, State Farm Insurance, with a score of 839, came out on top for the second year in a row. Globe Life followed with 812 and Mutual of Omaha finished third with 801.

American Equity Investment Life Insurance ranked first among individual annuity providers, with a score of 838, followed by Fidelity & Guarantee Life with 829 and Nationwide in third place with 822.

JD Power surveyed 5,583 individual life insurance customers and 3,152 individual annuity customers from June through August.

Share.

About Author

Comments are closed.