The Dutch pension system is often considered to be the best in the world. As a result of the financial and economic crises, low interest rates, an ageing population and increasing life expectancy, the Dutch pension system is under ever mounting pressure. Not only have there been several legislative changes, a new pension agreement and initiatives for pension cuts, pension-awareness has increased in the public arena and the perception of pensions has changed.
Customers have become more critical, demanding more transparency, clear communication and higher involvement. As competition increases, pension insurance companies are challenged to retain their clients and acquire new customers; by providing high service quality and maintain good relationships.
In collaboration with the VU University, Accenture conducted a research on customer satisfaction on Dutch pension insurance companies to define where insurers should put their focus to address the challenges mentioned. This is the first of two blog posts in which I discuss the results from this research. This first post will address the question: what determines customer satisfaction within pension insurance? In the second post these findings will be put into action, defining where insurance companies should invest their money in.
In general customer satisfaction is determined by two factors: the level of service quality and the level of relationship quality. And this is actually not the measured level of quality, but the level as perceived by the customer. Relationship quality is an overall assessment of the strength of a relationship and the extent to which it meets the needs and expectations of the parties. This is based on a history of successful or unsuccessful encounters or events.
Service quality on the other hand is the overall evaluation of the service provided. Service quality consists of among others tangibles, reliability, responsiveness, and assurance.
Relationship quality is most important determinant
Our research clearly shows that relationship quality is the most important determinant of customer satisfaction. Hence, a higher relationship quality of the pension insurer implies higher customer satisfaction. Customer satisfaction deteriorates when the business relationship between client and pension insurer is formal and distant. According to findings collected from interviews, clients aim for an informal and strong relationship with their pension insurer.
It is also important for a client to know who to call in case of problems and have the confidence that issues will be addressed.
Although relationship quality is the stronger determinant of customer satisfaction, service quality must not be forgotten. Where a good relationship can soften the impact of mistakes and issues, poor service quality can quickly turn into a dissatisfier. Providing and maintaining service quality at a sufficient level is therefore equally important; focusing on the topics that influence the perceived quality the most. When it comes to service quality, clients seem to rate the tangible services the best. These include for example the appearance of the physical facilities, tools and equipment and the appearance of personnel and communication materials.
This calls for action…
The determinants of customer satisfaction and the key findings of the research performed give direction to the actions to be taken by insurance companies. In the next post these actions will be made more practical, to help make the right choices as to where to invest the scarce investments resources.
For more information on the research, findings and the report, please contact me at rutger.a.hagendoorn@accenture.com or comment below.