Customer Lifetime Value: Can Insurance Carriers Bring Home the Love? – by Karen Pauli, TowerGroup

July 2009 — Customer value means different things across the insurance industry, and this lack of a shared view leads many carriers to conduct random customer initiatives that generate minimal value. Conversely, they could pay the same amount of attention to all customers, but doing so is expensive.

However, carriers must develop a focus on customer value to win back the trust and confidence of consumers whose positive view of financial services has been shattered by recent economic events.

This TowerGroup ViewPoint addresses the internal financial reasons to focus on customer value as well as the external demand to repair relationships and provides guidance on implementing initiatives to determine customers’ value.


Acknowledging customer value through differentiated products, pricing, and service demonstrates, in a tangible way, that insurance carriers understand the value of individual customers. Consumers expect products and services that are unique to their particular situation; thus, customer value initiatives are no longer optional.

Now is not the time to blast out generic coverage and product offers that have random applicability. Making customers wonder whether their insurance company really knows them will have disappointing consequences. It is too easy to switch insurance companies, and marketing studies frequently point out that most customers quietly depart, without complaining to anyone.

View the full report (5-page PDF).

Karen Pauli is the Research Director, Insurance at TowerGroup

About TowerGroup

TowerGroup is the leading advisory research and consulting firm focused on the global financial services industry. A respected source for trusted information and advice, TowerGroup brings many of the world’s leading financial institutions, technology companies, and professional services firms a deeper understanding of the business and technology issues impacting their organizations. Headquartered near Boston in Needham, Massachusetts, and with offices in North America, Europe, and the Asia-Pacific region, TowerGroup serves a global client base.

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