Like many industries, the local insurance sector has grappled with numerous unforeseen challenges over the past 18 months. A global health pandemic saw lapse rates and claims under pressure, while the resulting lockdown forced a new way of working, highlighting existing cracks in insurers’ operational systems.
One such crack has been insurers’ responsiveness – or rather lack thereof – on social media. This is according to the newly released South African Insurance Sentiment Index, which reveals 39.2% of priority conversation on Twitter went unanswered by South Africa’s top insurance brands over a 12-month period. Furthermore, for the 60.8% of priority conversation that did receive a response, insurers took an average of 12 hours to reply.
The index, conducted by DataEQ in collaboration with PwC, is based on an analysis of over 450 000 social media posts from consumers about 15 insurers from 1 April 2020 and 30 March 2021. Priority conversation refers to mentions that pose a reputational risk, as well as posts by customers who are threatening to cancel their policies, new customers looking to purchase a policy, and existing customers seeking help.
The need to improve customer outcomes and ensure fair treatment on digital platforms — through streamlined and responsive service — is also fast becoming a matter of regulatory compliance. As the financial sector prepares for full implementation of the Twin Peaks framework, the proposed Conduct of Financial Institutions (COFI) Bill looks to ensure that the six Treating Customers Fairly (TCF) principles are legally binding and enforced.
From a regulatory perspective, it is therefore alarming that over two-thirds (67.8%) of the priority complaints directed at insurers related to one or more of the TCF framework outcomes. The bulk (60.5%) of these complaints spoke to Outcome 5: Performance and Service, emphasising the fact that customer experience is a common complaint among insurance clients.
Improved responsiveness to customer mentions on social media would not only boost consumer sentiment, but also assist insurers in reducing the conduct risk they’ll face when the TCF framework is fully implemented, comments DataEQ CEO, Nic Ray.
“Given this scenario, insurers would do well to pay close attention to their online conversation and ensure they are equipped to identify through all the noise, the priority conversation that requires attention and action. Doing this not only improves outcomes for consumers, but also mitigates reputational risk while ensuring regulatory compliance,” Ray concludes.