ICICI Pru, SBI Life topple LIC from the top spot

Private insurers improve loyalty scores in the metros, go up the pecking order

Six years since the annual loyalty survey by Kantar-IMRB was instituted, LIC has been dislodged from the top slot. After being the insurer that customers were most loyal to by a big lead over the rest, LIC has slipped to third position with SBI Life and ICICI Prudential jointly taking the number one spot according to Insurance India 2017.

Interestingly, the life insurance industry commands high loyalty from customers, with stickiness growing in 2017 over 2016. Close to 80 per cent of customers said they would renew their policies with their current insurer. In contrast, the Kantar-IMRB Health Pulse 2016-17, a survey on health insurance in India, found the opposite is true for health insurance. In 2016, 74 per cent of the customers said they were truly loyal as compared to 84 per cent in 2015. The decline in loyalty was the maximum for customers in the 21-34 age band.

LIC’s drop down the loyalty ladder in life insurance, the survey reports, is not because it has underperformed, but that it failed to improve its ratings. At the same time, private insurers boosted their ratings significantly, not only closing the big lead that LIC once had, but also going past the national insurer in the process. Private players lead in the metros but LIC, the third most valuable brand in the country according to the recently released Brand Finance India 100, is still number one in small towns. 

Praveen Nijhara, executive director, Kantar IMRB and head of Stakeholder Management Division says, “This is the first time in six years that the public sector insurer has been toppled.” ICICI Pru and SBI Life, the two that have stepped ahead this year are also reflective of a larger trend where customers prefer to have a single provider for their banking and insurance services. “Customers look at the bank plus insurer equation with a greater element of trust,” says Nijhara.

Together LIC, ICICI Prudential, SBI Life and HDFC Life held the largest share of the insurance market at the end of 2016. But the biggest gainers in customer loyalty are ICICI Prudential, Bajaj Allianz Life, Birla Sun Life and Max Life. Puneet Nanda, executive director, ICICI Prudential Life Insurance says, “Our products are need-based and designed to meet various life stage requirements. We offer convenience through the digital platform and this makes for a superior experience.” 

According to the report, ICICI Prudential featured high on the loyalty ranks because, customers said, it had a more transparent system, the communication was complete and (more) accurate than the rest and because of availability of the (agent/bank) representative when required. SBI Life scored highest on channel experience, politeness, knowledge, commitments fulfilled, clarity of details shared and also on being easy to deal with and easy to get in touch. Abhijit Gulanikar, president, Business Strategy, SBI Life says that their story is all about "Strong sales processes, customer friendly products, and robust servicing standards.” Plus a wider product range has helped net new customers.

According to the report, insurers need to continue their efforts in three key directions. One is to ensure consistent, clear and transparent information across all channels. Second is to ensure that the relationship with customers goes beyond sale, which calls for the support of the distribution channel. This is critical because nearly 40 per cent of customers who mentioned they had a problem with their insurance policy in the last six months did not reach out to the insurer for resolution. A reliable network of agents may well have helped address their issues. Third is to look at the customers in the smaller cities more closely and differently, not just in terms of the product and pricing, but also to promote financial awareness and helping customers with the right information before purchase. This is especially critical as small cities are expected to be the growth drivers and insurers have stumbled on this score in the past. 

Insurers also need to take a close look at their digital marketing and service channels as the number of customers accessing online services is still a small number. Without a stronger push from the insurers, customers are unlikely to take the online route.