NEW YORK - Life insurers provided slightly above average customer service in 2005 compared with other industries, but two insurers' service capabilities plunged against 2004's strong results.
Scores of MetLife (71) in New York and Prudential Financial (72) in Newark, N.J., declined in 2005 by 7.8% and 6.5%, respectively. Both companies were among the top performers in the life insurance sector in 2004.
Those were among the findings of the "American Customer Satisfaction Index," released last week by the American Society for Quality in Milwaukee and the University of Michigan in Ann Arbor. The index ranks customer satisfaction for 200 companies, including those in the financial, retail and e-commerce industries.
"We are certainly surprised by these results," said Holly Sheffer, a spokeswoman for MetLife.
"We haven't seen the survey results, or explanatory or supporting data, and, therefore, we decline to comment," said Jim Gorman, a spokesman for Prudential.
Life insurance companies and banks both scored 75, the same as last year and slightly above the 73.5 total for all industries combined.
Scores were calculated based on formulas and don't represent percentages of satisfied customers.
"Part of what the customers say is subjective, but subjective information can drive stock prices and economic growth," said Claes Fornell, director of the University of Michigan's National Quality Research Center. "Some say that perception is reality, and vice versa."
"A decline in service and increase in premiums are pretty sure to make customers upset," said Mr. Fornell, referring to MetLife and Prudential. "Customers are perceiving that prices are going up relative to the coverage and the total package they are receiving from these companies."
"Our latest survey of over 90,000 policyholders found that their understanding of key product features exceeded 98%," said MetLife's Ms. Sheffer, disputing the index. "About 98% were satisfied with the sales process. In addition, the number of marketing-related customer complaints dropped by 14% and are at the lowest level in over 20 years." A low or declining score doesn't necessarily mean that the company isn't trying to improve the quality of services.
"Some quality improvement techniques are more focused on internal systems for operational efficiency and productivity, and aren't noticed by the consumer
at all," said Jack West, past president of the American Society for Quality.
MetLife and Prudential - companies owned by stockholders - were "more driven by the pressure to generate quarterly results in line with investor expectations," the report accompanying the index speculated. Policyholder-owned mutual insurers, such as Northwestern Mutual Life Insurance Co. in Milwaukee, generally scored higher than the investor-owned companies.
Winners and losers
Despite well-reported customer griping about how hurricane claims were settled, property-casualty insurers scored 78 - the highest among the three insurance sectors.
Banks that minimized ticking off customers through unfairly denying loans and raising interest rates on credit cards scored well. Wachovia Corp. (79) in Charlotte, N.C., ranked the highest.
The most significant 2005 bank decline was for Wells Fargo & Co. in San Francisco - down 4.3% from 2004. Its score of 67 was the lowest for any bank since 2001 - possibly because disruption from integrating acquisitions caused service to decline, the report noted. Many banks were involved in consolidations during the past several years, but Wells Fargo was especially active, Mr. Fornell pointed out.
Online retailers scored the highest (81), with the web-based booksellers doing especially well. Stockbrokers' online trading operations scored 76, down a point from 2004 and considerably lower than other types of companies that provide their services mainly via the Internet.