JD Power survey shows that that annuity customer satisfaction has also dropped for the same reason.
Individual life insurance and annuity products have arrived at a customer engagement problem according to a recent JD Power study.
The JD Power 2022 US Individual Life Insurance Study and the JD Power 2022 US Individual Annuity Study were both released last week and showed that customer satisfaction with both those products begins to drop quite quickly after their purchase. This not only leads to a low likelihood that those consumers will decide to buy other forms of coverage and financial services products, and also underscores a lack of understanding of the products consumers have already purchased.
“After a brief surge during the height of the pandemic, overall customer satisfaction with individual life insurance and annuity plans have now reverted to their previous long-term trends in which customer satisfaction declines as tenure with the product increases,” said JD Power director of global insurance intelligence Robert M. Lajdziak.
After the largest one-year increase in life insurance customers satisfaction, it’s now plummeting.
“It’s clear from our data that insurers are struggling to maintain regular contact with customers and to reinforce a unique value proposition during the length of the relationship,” said Lajdziak. “That not only limits potential future sales opportunities, but also exposes incumbents to competitive threat from insurtech start-ups that are leveraging digital to deliver a more multi-channel approach to client engagement that is resonating with customers.”
The research found that a year after the largest increase in customer satisfaction recorded, which occurred in 2021, overall satisfaction with life insurance fell two full points to 774 (out of 1,000) in 2022. According to the report, this was driven by reductions in interaction with agents and advisors, call centers and websites. This trend was considerably worse in individual annuities, where there was a 13-point drop in customer satisfaction to 789, led by sharp declines in product offerings, price satisfaction and communications.
It likely comes as no surprise that digital has now become the preferred means of interaction. That said, advisors and insurance agents still play a central role in customer satisfaction with these products.