| INSURANCE PSUs LOSING OUT ON CONSUMER RATING, FINDS 'VOICE' STUDY |
| By : Puneet | Previous | Next |
| Posted on : 28 Apr, 2006 | Total Views : 801 |
[India’s First Ever Customer Satisfaction Study on Insurance Sector]
Thousands of consumers are dissatisfied with the way their claims are serviced, despite spending money on insurance policies and premium. This was found in a nation-wide study of four insurance sectors – Life, Health, Home and Motor insurance. The study was conducted by Voluntary Organization in Interest of Consumer Education (VOICE), India’s leading consumer organization. Covering 3600 consumers in 8 metros, the study included 12 life insurance and 11 non-life insurance companies. Interestingly, it revealed that none of the companies could boast of a satisfied customer base.
Says Bejon Misra, CEO, Voice, “Public sector insurance companies (PSUs), despite their long–standing presence in the insurance sector, are losing out on their customer base as consumers steadily lose confidence in their service. Main factors affecting their consumer perception include tardy internal redress system, employee’s rude behavior and general apathy to consumer’s interests.”
The complete study, available on the NGO’s website, www.consumer-voice.org, has been supported by the Ministry of Consumer Affairs, Government of India. The comparative study conducted for the first time on a service sector in India has evoked anxious interest among many insurance companies. Says Misra, “When we invited insurance service providers to share our research parameters and methodology before the start of the study, only four companies participated in the meeting. However, when the findings were sent to the same companies after completion of the study, as many as 13 insurance companies came to the roundtable to see how they and their competitors were doing.”
The study embarked on seven merit parameters to evaluate the rating of the insurance companies. These included tangibility, problem solving, reliability, responsiveness, assurance and empathy. The companies covered under life insurance included Aviva, Bajaj Allianz, Birla Sun Life, HDFC Standard Life, ICICI Prudential, ING Vysya, Kotak Mahindra, LIC, Max New York Life, Met Life, SBI Life and Tata AIG. Among the non-life insurance companies were Bajaj Allianz, Cholamandalam, HDFC Chubb, ICICI Lombard, IFFCO Tokyo, National Insurance, New India Assurance, Oriental Insurance, Royal Sundaram, Tata AIG and United India.
The study has also opened a can of worms for the insurance sector. It found that whereas health insurance in India has most dissatisfied customers, home insurance on the other hand is a sector neglected both by the customers as well as the companies. In life insurance, the study found that though LIC still holds the lion’s share at 80% of the market, it is no longer the only option that customers are considering now. Product differentiation is at its peak in this life insurance sector, with private players providing additional sops like allowing maximal grace period for payment of premium, prompt service, and doing away with delays in giving payment receipts. Some players also woo their customers by sending quick reminders, thereby taking the role of their private secretaries.
In the motor insurance sector, the Consumer VOICE study turned the tables on the lack of interest taken by the consumers. The study found that most consumers do not even bother to find out who their motor insurance service provider is – a decision they generally leave on their motor vehicle dealer. Not surprisingly, then, the insurance companies spend more time and resources tying up with dealers, rather than investing on providing better standards of service to the consumers. As a result, many of the 949 customers interviewed in this motor insurance sector felt that disputes later arose when the insurance companies downgraded the claim of the insured, by alleviating estimation of damage.
The new entrants in the arena – Third Party Administrators, or TPAs as they are called, did not fare any better, either. Says Ms. Namita Chhetri, National Head – Research, Indian Council for Marketing Research, “TPAs are also a source of discontentment among consumers, especially those associated with the PSU insurance companies, with issues concerning settlement of disputed claims, quality of service and infrastructure and service from empanelled hospitals.
Amidst such frantic race to win customer loyalty, alarm bells sure have been sounded for the PSUs, which have been moving at an elephant’s pace. They need to tighten their belts, and provide better service to the customers to hold on to their crowning glory. Cautions Bejon Misra, “Even though private sector players have a smaller market share as compared to the PSUs, all five top positions on the consumer perception index are taken by the private sector entities.”
Written By : Puneet
