Customer Value Management

Executive Summary What is this report about?

This report aims to identify the importance and long term benefits from adopting a customer value management (CVM) strategy for a life insurance company (“insurer”) in Singapore. It highlights the reasons why insurers need to adopt a CVM strategy and showcases the various means by which the strategies facilitate customer satisfaction which in turn results in profitability for the insurer. By following a well planned CVM Framework, an insurer will be able to analyze customer data, calculate profitability per customer, identify key customer drivers, and segment customers, thus targeting the right customer with the right product at the right time using the right channel of distribution.

The report will benefit an insurer already based in Singapore as it highlights best practices and case studies of existing players in Asia and what they are doing to acquire and retain new customers in this region. The insurer can also focus on the key drivers and specific needs of the insurance customer in Singapore and position itself accordingly.

Along with the CVM Framework, the analysis and recommendations from our research will benefit a life insurer in determining whether or not it is aptly positioned to penetrate the life insurance industry in Singapore and to a large extent the Asia Pacific market.

Research Methodology

For the purpose of this report we performed both primary and secondary research which assisted us in refining our objectives as described in Figure 1:

Customer Value Management (CVM) Framework

Based on our secondary research we described the process flow for a CVM framework for a life insurance company. The successful implementation of a CVM based strategy involved understanding and performing the following key processes:

Best Practices of CVM in the Life Insurance Industry

Highlights of the best practices followed by insurers, brokers and advisors in the Asia Pacific region are depicted.

Introduction What is CVM?

In industries where products, marketing promotions and channels are transitory, organizations are increasingly recognizing the importance of customer relationships. Today customer relationships play a very important role in increasing the profits of any organization. There are reports which suggest that customer retention of 5% may increase the profits of a company by 25% or more[1].

An organization experiences increase in profits primarily when the customer makes more purchases thereby offsetting the acquisition cost. Efficient customers over a period of time tend to be more cost effective to service as they are well versed to dealing with the organization.

Loyal customers are a source of value for an organization but are scarce in nature and managers must maximize customer value and formulate strategies to successfully measure and align it with the organization's goals. As we evolve from product centric to customer centric marketing, a set of best practices are emerging to measure and increase the lifetime of the customer. These practices are defined as Customer Value Management[2].

CVM in the Life Insurance Industry

The life insurance industry, long considered a pillar of stability, is now facing major challenges stemming from various internal and external factors:

* With increased competition as a result of globalization and the de-regulation of markets worldwide, several new entrants have entered the playing field making customer acquisition and retention all the more challenging. These new entrants include financial institutions such as banks and security firms.

* Advent of new technologies is challenging the effectiveness of previously established product distribution channels and has given the customer access to shop for life insurance products from multiple web based platforms such as www.policybazaar.com in India and www.compuquotes.com in the United States, with each offering different quotes for the same product offered by various organizations (life insurance companies)[3].

* Rising costs as a result of high number of fraudulent activities is declining the life insurance industry's profitability.

The strategies deployed by organizations to tackle these challenges will have a profound effect on both short and long term profitability. One such strategy that can make a positive impact on the profitability of an organization is Customer Value Management.

Customer Value Management (CVM) from a life insurer's perspective revolves around the identification of each profitable customer. Upon identifying this customer, CVM techniques can be used to measure the return on investment made by the organization in acquisition, growth and retention of the profitable customer. If the return on investment from the profitable customer is positive then the insurer should further implement strategies to maximize the lifetime value of its relationship. At the same time CVM solutions also facilitate an organization in:

* Segmenting customers by similar risk profiles

* Improving cross selling and up-selling programs

* Improving the effectiveness of the marketing campaign

* Maximizing profitability

The successful implementation of a CVM strategy also involves the identification of the following:

Right Customer

Objective

Identifying profitable customers and reducing customer acquisition costs.

Traditional Practice

Acquire competitor's customers irrespective of profitability from each customer.

Current Practice

Acquisition of only profitable customers likely to generate repeat business.

Example

Consider two life insurance companies, one that focuses on providing life insurance products to “safe customers” and the other serves customers that fall in the high risk category; individuals engaged in adventure sports and activities such as mountaineering, cliff diving, cave exploration etc. The “safe customer” company would be acquiring the wrong customers by advertising in adventure sports magazines.

Advantages

* Lower customer acquisition costs

* Higher profitability per customer

Right Product

Objective

Providing the right customer with the right product thereby increasing customer retention and reducing costs.

Traditional Practice

Providing an array of life products irrespective of the customer's preference and need resulting in customer dissatisfaction and attrition.

Current Practice

Providing only those products as desired by the right customer by segregating them on the basis of demographics, purchasing habits, lifestyle and risk factors.

Example

In Europe, life and health insurance companies determined that majority of their customers wanted to be fit and live a healthier lifestyle. Insurers provided their customers with a product which included incentives such as discounts on health club memberships and seminars on nutrition and healthy eating.

Advantages

* Increase in customer retention

* Increase in cross and up selling opportunities

* Decrease in the number of claims filed

Right Channel

Objective

Having identified the right customer and the right product for that customer, approaching the customer using a preferred channel of distribution.

Traditional Practice

* Direct-response[4] marketing such as direct-mail and telemarketing targeted towards all customer segments including those that preferred a face-to-face meeting.

* Before the advent of Web 2.0 organizations relied on marketing intermediaries such as agents and brokers.

Current Practice

Besides using traditional direct-response marketing media and intermediaries, organizations have also launched web portals, comparison websites, and formed distribution alliances with financial institutions to sell products.

Examples

* A study conducted by a British firm, Datamonitor in 2007, revealed that aggregators and comparison websites account for instigating 22% of individuals seeking motor insurance[5]. Likewise websites such as www.policybazar.com in India target price conscious customers seeking better deals online. Another study by Datamonitor revealed that in 2007, 37% of those individuals that purchased insurance online changed their provider upon renewal as compared to 17% that purchased through call centers[6].

* The recent bank assurance alliance between Prudential Corporation Asia and UOB Life Insurance Limited will give Prudential the opportunity to sell its products to UOB customers in Singapore, Thailand and Indonesia.

Advantages

* Offer more comprehensive life insurance products through direct-response marketing methods.

* High response rates from personalized direct-response methods

* Well informed customers and higher customer retention

Right Timing

Objective

To make the sale and to win a customer for life by marketing the right product at the right time.

Traditional Practice

Organizations either marketed the right product at the wrong time or were unable to identify the right time to promote a product. In either case the customer was not acquired and/or retained.

Current Practice

With the use of sophisticated data analytic tools, organizations are able to predict customers' future purchasing habits with the passing of each life stage. They then target the customer whose life insurance needs change due to:

* Marriage

* Birth of child

* Schooling of child

* Marriage of child

* Retirement

Example

Customer A bought a life insurance policy a couple of years ago and declined coverage for her immediate family citing lack of disposable income. However, Customer A's preferences may have changed now and assuming her experience with the product, customer service, and the insurer has been satisfactory thus far and she has a higher disposable income than she did earlier, she can be contacted again for buying life insurance for her family.

Advantages

* Increased cross and up selling opportunities

* Increased customer retention

* Decreased customer defection

Customer Perception of the Life Insurance Industry

Life insurance products are considered by many as complex yet much needed to minimize risk. Organizations have come up with products that meet the needs of the individual customer, however because the insurance contracts are fraught with complex legal terms, the customer ends up perceiving the life insurance industry as one that is not transparent and “user-friendly”. Furthermore, customers consider insurers as organizations that are only interested in ensuring that their customers pay their policy premiums on time; however when it's time for the insurer to resolve a claim or a dispute the turnaround time is slow resulting in frustration and anxiety for the customer. To cite an example of customer perception towards the insurance industry, an insurance survey by IBM and University of St. Gallen in Switzerland revealed that roughly 60% of the participants[7] did not completely trust their insurance company.

Because of such negative perceptions the insurer faces a high rate of customer defection. As the cost of acquiring a new customer are much more than the cost involved in retaining an existing one, insurers are coming up with innovative methods to build and foster a long term relationship with their valuable customers:

Creating trust and reliability: More than 80% of the participants in the IBM and University of St. Gallen insurance survey placed a high value to honesty and trustworthiness and building a solid reputation in the market has become ever so more important for an insurer. Organizations are taking actions to build trust and credibility by:

o Modifying the legal jargon in insurance contracts to simple, brief and layman terms.

o Remodeling the direct selling agent's compensation package to include commissions based on parameters such as repeat sales and customer retention, thereby encouraging them to act more customer oriented.

o Establishing social communities such as interactive web portals, blogs and chat forums, thereby fostering communication with the customer. This strategy has also given insurers with invaluable information about the customers evolving needs.

Creating an ensemble of touch-points: This strategy involves personalizing the approach to customers and making meaningful touch points available to generate a positive and rewarding experience for customers and the organization. For instance, price sensitive customers rely on the Internet when shopping for a life insurance policy, whereas relationship oriented customers seek advice from insurance agents / brokers and banks. Various touch-points available for customers of a life insurer can be bucketed as depicted in Figure 6.

Therefore, it is essential for an organization to plan carefully before deploying or cutting back on any of the above touch points.

For instance, in the first quarter of 2009 tied agency channels contributed to 59%[8] of total new business generated in Singapore. If an insurer were to downsize its tied agency channel it could result in a high rate of customer defection for a customer segment that seeks a personal relationship based on reliability, sound advice, and competence.

Being flexible to the customer's needs: The insurer should make room to tailor the offerings to the specific requirement of the profitable customer. Furthermore, in the life insurance industry, multiple insurers offer similar products but the ones that offer flexibility are the ones that are able to hold their market position as well as attract the competitor's customers.

In North America and Europe, customers have identified various aspects of flexibility from their insurance providers. These aspects are covered in Figure 7.

As customers in the Asia Pacific region become more and more sophisticated for their life insurance needs they will require similar levels of flexibility (as noted above).

Need for CVM in the Life Insurance Industry

Based on the challenges faced by players in the global life insurance industry, we have identified the Strengths, Weaknesses, Opportunities and Threats (SWOT) typical to the industry and the impact of such on the insurer as well as the customer. The objective of the exercise is three-fold:

* Firstly, identify the key strengths, weaknesses, opportunities, and threats in the life insurance industry.

* Secondly, identify the impact of the strengths, weaknesses, opportunities, and threats on the insurers and their customers.

* Thirdly, to justify how an insurer can implement strategies and solutions to mitigate the weaknesses and threats and capitalize on strengths and opportunities.

STRENGTH

KEY STRENGTHS

IMPACT ON INSURER

IMPACT ON CUSTOMER

STRATEGY

Consolidated customer and marketing databases.

* More accurate prediction of changing customer needs

* Faster turnaround time in resolving claims and disputes.

* Customer has products that meet insurance/investment needs.

* The systems and customer data should be shared across the organization to promote innovation in business solutions.

Multiple products offerings

* Targeting and acquiring various customer segments

* Increases customer retention by cross selling and up selling

* Customers have multiple products to meet their changing needs and circumstances.

* Identify the most profitable customer segment and retain them by offering innovative products and quality service.

Multiple distribution channels.

· Increased profitability.

· Multiple distribution channels have given access to a wider customer base.

· Customers obtain product knowledge from their preferred touch points.

· Increases brand perception and product knowledge.

· Target specific customer segments through cost effective and customer preferred distribution channels.

Flexible payment options (ex. payment in installments, cash, cheques, and credit/debit cards).

* Increases revenue generation, customer acquisition, and retention.

* Customer values flexibility and convenience and remains loyal.

* Marketing strategy to showcase the differentiating factors not provided by competitors.

WEAKNESS

KEY WEAKNESSES

IMPACT ON INSURER

IMPACT ON CUSTOMER

STRATEGY

Important customer data resides in silos resulting in poorly defined customer segments.

* Customer information resides with different departments preventing a holistic view of the customer.

* Wrong products sold to the wrong customers resulting in customer dissatisfaction.

* Consolidate and analyze customer data residing in various systems to identify profitable customer segments likely to do repeat purchases.

Lack of information sharing across departments marked with territoriality and fierce internal competition.

* Results in weak product orientation and ineffective cross selling and up selling opportunities.

* Results in defection to competitor as insurance needs are not satisfied.

* Develop a common repository of customer data to provide various departments with the ability to develop products and provide quick response to changing needs.

Lack of trust and reliability on the insurer.

* Negative reputation leads to mass customer defection.

* Un-satisfied customers pass on the poor experience to prospective customers

* Promote social computing communities such as blogs, chat forums. Also provides value add information about the customer.

Snail paced claims and dispute resolution.

* Higher costs and time to serve the customer as multiple follow ups are required.

* Increased customer frustration due to lengthy dispute resolution period.

* Implement analytical models to predict and quantify the likelihood of claims.

* Measure and reward employees on time taken to resolve customer disputes.

Insurance contracts are loaded with complicated insurance jargon.

* Increases in cost per customer

* Customer dissatisfaction and defection

* Simplify insurance contracts

* Recruit knowledgeable agents to assist customers.

Insurance agents are primarily commission driven and are not customer oriented.

* Results in tarnishing the insurer's reputation.

* Customer perceives a negative image of the insurer when faced with agents that are solely motivated by profits.

· Remodel agent compensation to include commissions based on parameters such as repeat sales and customer satisfaction surveys.

· Make customer centric training programs mandatory for all agents.

OPPORTUNITY

KEY OPPORTUNITIES

IMPACT ON INSURER

IMPACT ON CUSTOMER

STRATEGY

Tie-ups with banks and other FIs will give access to a wider customer base.

* Lower cost of acquisition of new clients.

* Lower operational costs.

* Financial and protection needs are met by a single channel.

* Develop bancassurance agreements to target a bank's customer base.

Un-tapped markets such as HNWI and Takaful (Islamic insurance).

* Access to a wider client base resulting in increase in profitability.

* Positive brand building exercise.

· Ability to provide protection for themselves and family.

· Diversification of investment strategy for HNWI.

· Launch products to non-mass market segments.

· Organize brand awareness campaigns in locations that are frequented by such segments.

Deregulation has opened new markets.

* Insurers have access to a wider customer base.

* Competitive premium to the customers.

* Market entry strategy for de-regulated countries.

Since the 3rd quarter of 2009, new business premiums in Singapore have been consistently increasing[9].

* Opportunity to re-acquire customers.

* Multiple product and service offerings at competitive prices.

* Acquire customers that defaulted during the financial crisis by providing coverage at the same premium or payment in installments.

Increased competition from the Internet.

* High costs involved in changing and/or updating technology platforms.

* Customers have a clearer idea of product offering and higher bargaining power over insurers.

* Provide high quality service to convert a one-time online sale by cross selling and up selling.

THREAT

KEY THREATS

IMPACT ON INSURER

IMPACT ON CUSTOMER

STRATEGY

Deregulation of the insurance industry has increased competition from new entrants.

* Lower profit margins and increased customer acquisition and retention costs.

* Financial and protection needs are met by a single channel.

* Joint venture, merger or acquisition with/of a bank and other financial institutions.

Increased competition from the Internet.

* High costs involved in changing and/or updating technology platforms.

* Customers have a clearer idea of product offering and higher bargaining power over insurers.

* Provide high quality service to convert a one-time online sale by cross selling and up selling.

* Develop a powerful and customer friendly web platform.

Rising costs due to increase in fraudulent activities.

* Lower profit margin and increased operational cost.

* Customer dissatisfaction with high turnaround time for claim resolution.

· Implement CDI tools to reduce duplication of records and redundant customer data.

New government regulations may result in lowering profit margins for the insurer.

* Inability to serve customer segments resulting in declining profit margins.

* Customer has limited option of products to choose from or has to pay higher premiums.

* Develop products that abide by government regulations but at the same time are able to meet customer needs.

Implementing a CVM Framework for a Life Insurer

Customer Value Management (CVM) provides a systematic methodology of modeling the value proposition relative to competition by putting process improvements into operation and communicating these improvements back to the customer in terms of better service and value add.

From a life insurance organization's point of view, customer value management can be structured into the following three components[10]:

Ø Analysis

Ø Planning

Ø Continuous Improvement

The three components interact with each other to drive the value proposition of the customer. The components align business operations with the value proposition and create specific action plans to help realize the customer value over a lifetime.

CVM components can be further broken down in to a structured process as shown in Figure 8. This is done to deliver the specified objective of implementing a customer value management strategy for a life insurance company (insurer)

The phases explained in Figure 8 are summarized in the below section.

Analysis

The Analysis Phase consists of analyzing data and formulating strategies using data mining techniques to improve the customer profitability. The key processes which are included in this phase are:

Ø Data Quality and Single Customer View[11]: To improve profitability from the customers, analysis of the customer data stored in various systems is performed. Thus life insurance companies need to integrate them to understand the customer trends and purchase patterns.

Ø Life-time Value Model: Once the data is integrated, it is used to calculate the life time value of existing customers using various available methods. Discounted Cash Flows (DCF) method is one such model.

Ø Key Drivers: Key value drivers for a life insurer are determined by analyzing the data from the single customer view and the life time value model. Identifying key drivers that affect the purchasing decisions of a customer and the method by which an organization delivers on those drivers forms an important part of the Analysis Phase.

Ø Segmentation: Based on the customer values generated by lifetime value model, the customer segments are segregated into current and future low to high value customers. Further these customers are also segmented based on demographics, customer behavior etc. to capitalize on the current and future trends in the life insurance industry

Planning

The Planning phase ensures that the information collected after analyzing the data is valid and relevant for improving the customer value. Strategies at product and market level are formulated and implemented in planning phase. The tasks associated with planning phase are:

· Planning at the Business and Product/Market Level: Campaign planning based on customer segment is associated with planning at product and market level to implement the overall strategy of the organization. Campaign planning may include marketing plans, product development, cross-selling or up-selling of products to existing customers. After the completion of campaign planning, campaigns actions are implemented with intend to improve the customer profitability. [12]

· Key performance indicators: Based on the overall strategy, key performance indicators are identified based on financials, marketing performance, customer satisfaction, customer retention. These indicators allow insurers to measure the outcome of various actions on a periodic basis.

Continuous Improvement

Continuous improvement phase includes updating of action plans and strategies to make it more efficient and effective to achieve the organizational objectives. Objectives of continuous improvement are achieved by:

Ø Continuous performance measurement: The performance indicators established in the planning phase should be reviewed on a periodic basis to avoid any deviations from the stated objectives of each business unit.

Ø Process Improvement: Based on the outputs generated from the actions plans and performance indicators implemented in the planning phase, associated processes and action plans are updated to make it more efficient in achieving the stated objectives.

Each phase will be dealt separately and in more detail in the following sections of the report.

Analysis

The Analysis Phase consists of analyzing data to identify the key drivers which affect the value of a customer and segment customers to improve the profitability of the insurer. The analysis of data establishes a relationship and a trend between the internal information and the market value of customers. This phase includes an analysis of the following processes: Data Quality and Single Customer View

Over the past decade, insurance companies have gradually started shifting their focus from policy sales, pricing, and claims to understand the needs of the customers and the possibility of repeat purchases of additional products from these customers. Insurance companies have now started servicing and understanding the customer's needs from a holistic perspective and further the insurer's efficiency to service their customers is dependent on the information provided by the customers on the use of specific products and services. The information solicited from customers is used by insurance companies in developing new and re-modeling old products, by call customer representatives in providing quality service, and by marketing departments in selling new products to segmented customers.

To achieve the above, insurance companies have started stressing on the need for customer data integration (CDI). A typical data integration solution (Figure 9) should encompass the following subsystem in the life insurance organization.

An insurer needs to integrate various components of an insurance policy management solution into one and use data mining techniques to recognize the current customer trends, purchase patterns and fraudulent activities.

Customer data integration in the insurance industry creates growth in the company's top line by:

ü Improving the design of insurance products and pricing;

ü Increasing the success rate of marketing campaigns; and

ü Improving the overall customer experience resulting in maximization of the customer's life time value

Similarly, customer data integration also makes a positive impact on the bottom line of a life insurance company by:

ü Streamlining the service centers and leading to shorter call times, resulting in increased customer profitability; and

ü Savings in several operational areas such as claims

Figure 10 displays the benefits of customer data integration as it applied to the organization. To further elaborate on how insurers can leverage from customer data integration let us demonstrate its effect on the following areas of the company:

Product and Service Offerings: A typical product development process at an insurer is described in Figure 11. The figure highlights the data required from various sub-systems for product development. Data integration reduces the time required for product development using improved analytics. In short the insurer can have the first mover advantage by reducing the product development lifecycle.

Insurers also spend a significant amount of time in customizing enrolment materials, benefit summaries, and claim submission forms and reports for a major customer. These activities have a high cost as they require the services of sales, underwriting, compliance, and legal and can wipe out the entire cash flows and profit expectations of the insurer.

Here, data integration plays a significant role in formally defining, marketing and tracking these services and developing them. Data integration allows the insurer to integrate information about its target customers and their use of high cost services and bundles these services with the product to improve the pricing model. This enables an insurer to recover its costs incurred in designing the product and services while providing high end customers with value added services at the same time.

For example, Eurovida[15], a Portuguese life insurer and part of Grupo Banco Popular faced a challenge of providing its customers with the right products in the most cost effective ways while driving growth, profitability and shareholder value. It was only after they deployed an activity-based management system were they able to consolidate customer and product data thereby determining the profitability of products and the costs incurred in delivering the product and service to the target customers.

Marketing and Sales: An immediate advantage of customer data integration in the life insurance industry is the ability to detect and consolidate duplicate records. Eliminating duplicate records result in lowering marketing costs such as postage and production to a great extent. Integrated customer data also benefits sales teams by making information easily available, by improving sales efforts on the right customers and on the right activities, as opposed to spending majority of the time on managing customer inquiries and service calls. Additionally, with integrated customer data, sales teams have a centralized repository of customers past purchases thereby giving them countless opportunities to cross and up sell to customers.

For example, an insurance carrier made an additional $120 million in revenue by increasing its cross/up selling opportunities from 2.2 products per customer to 2.25 products per customer[16].

Max New York Life in India[17] identified that only 7% of its new revenues came from cross selling products to existing customers and only 1% owned more than two policies. However, once the insurer integrated its customer data systems into one single repository it experienced an increase in customer retention by 300 to 400 percent as its sales teams were able to cross sell a second and third product to the customers.

Customer Service and Claims: An insurer's call center is often bogged down with excessive number of follow up calls as it is unable to resolve the customer's issue because of lack of customer data in one single repository. This results in increased costs of millions of dollars to the insurer and also un-satisfied customers.

For instance, it could cost an insurer, lacking a central customer data repository S$9 million a year for handling three million calls at an average cost of $3 per call.

Errors made by the claims department cost millions of dollars to the insurer as well as un-satisfied customers. However, with CDI customer data from all sources and systems provide the insurer with quick and accurate turnaround time in the processing of claims. Efficiencies in claims processing will also increase customer retention at times when the insurance industry is fraught with competition and a slow-growth market.

Fraud Detection and Compliance: The Coalition against Insurance Fraud has estimated that the cost of fraud throughout the insurance industry is as high as $80 billion each year[18]. Integrating customer information from multiple systems can assist a life insurer in consolidating customer records and eliminating name and address inconsistencies, providing a holistic view of the customer's policies and claims which may be spread across different business units and geographies, thereby preventing overpayment of claims and fraudulent activities.

To give an example of how compliance issues affect insurers let us assume a customer who has signed up for the “Do Not Call” registry in the Unites States. If the insurer does not have an integrated customer database it faces a high probability of a law suit from such a customer, which in turn can tarnish the reputation in the market.

HCSC the parent company of Blue Cross and Blue Shield is connecting and putting members, claims, and product data together from multiple sources into a common platform and with the use of advanced analytics such as IBM's FAMs (Fraud and Abuse Management System) has been able to identify in real time an average of 30 cases of fraudulent claims a year per analyst thereby saving their customers millions of dollars in the future[19].

Life-time Value Model

Determining the lifetime value of customer requires customers to be viewed as investments, just like equity. Some customers can be blockbusters whereas some may not perform as expected. To evaluate customer value future cash flows from each customer is required which means the future revenue sources and costs associated with them needs to be calculated. One of the methods used to calculate the customer life-time value is discounted cash flow model (DCF).

On the basis of the DCF value for each customer, an insurer can identify, prioritize, and target customers who are similar to the most valuable customer. The DCF values also enable the insurer to identify the key drivers of customer satisfaction.

Identifying Key Drivers

Upon calculating the customer's life-time value, an insurer must identify the key drivers that instigate a customer to buy a life insurance product. These drivers (see Figure 12) are common to the insurance industry and are not ranked as most and least important in this section of the report.

The impact of these drivers on a customer's insurance purchasing habits will be described and analyzed more in detail in Research Findings and Analysis section of the report:

Price

In 2007, the IBM Institute of Business Value and University of St. Gallen in Switzerland conducted an insurance survey[20] of seven European countries. The survey revealed that for 20% discount in premiums, 74% of the respondents would communicate exclusively over the telephone or Internet as opposed to other communication channels (see Figure 13). Insurance customers are like any other customer - price driven but price is not the only driver to influence the purchasing decision. For instance, in Asian countries where the culture is very people and relationship oriented, the key driver apart from price includes the relationship that the customer has with the insurance agent or the financial advisor. Today, insurers are aware that majority of its customers shop around for a cheaper premium policy but it is the satisfied customer that is more likely to remain loyal.

Insurers should focus not only on pricing the premium competitively but also on enhancing the level of after sales-service and build a relationship based on trust and transparency.

Product

In the life insurance industry the insurance policy is a key driver as it provides the policyholder with the appropriate level of life protection and coverage against terminal or critical illness. Traditionally, an individual signed up for a life insurance policy so that during an illness or upon death the family would not have to suffer from any financial repercussions. However, today the benefit of having a life insurance policy goes far beyond just providing life coverage and is viewed as a popular source of investment and savings.

For example, NTUC Income, a Singapore based insurance company provides its customers with not only whole and term life insurance but also a combination of several savings, investment and insurance products for various customer segments.

Relationship

The relationship driver centers on the personal relationship that the customer has with the insurer and its distribution channels. Once a relationship of trust, transparency, and honesty is established with the customer, the insurer/advisor has the potential to cross and up sell other products to the customer and his/her contacts. In Asia, the relationship factor is given a lot more importance and has the potential of generating new business revenues from referrals for insurers and brokers. According to the survey[22] conducted by the IBM Institute of Business Value and University of St. Gallen, only 42% of respondents trusted their insurers and 75% of the respondents placed high importance to transparency in insurance quotes and contract details of insurance policies.

To promote transparency, insurers should simplify the policy documentation which is often perceived by the customer as an area loaded with a number of hidden clauses that are designed to confuse the customer. Additionally, agents should be knowledgeable and transparent in their approach to customers.

Insurer's Image/Brand Name

Since the aftermath of the recent financial crisis, insurance customers have become ever more brand conscious and have ceased their relationship with insurers that have been severely affected by the crisis.

For example, after AIG's collapse in September 2008, customers of its Asian arm, AIA panicked and desperately tried to cancel their insurance policies and investments as they lost faith in the parent insurer's going concern. As a result in August 2009, AIA launched a major regional advertising campaign called “We are Asia”[23] to re-align itself as an entity independent of AIG and to win back thousands of customers in Asia. Similarly, insurers can develop strategies to promote their brand by organizing free health drives in hospitals, sponsoring health related events, and using an ambassador for promoting healthy life style.

Service Quality/ Employee Know-how

The service quality driver focuses on aspects of the service delivery process which includes time taken to settle claims, flexibility of insurer to change the coverage depending on customer's circumstances, and ease of access to agents/employees. The IBM and University of St. Gallen's insurance survey (see Figure 13) revealed that more than 80% of the respondents gave fast and uncomplicated claims processing the highest importance. Insurers must also streamline their processes and organizational structure to reduce the time required to serve each customer. Additionally, an insurer's marketing department may interact with customers and collect feedback about the services and gather information about customers' perceptions of the policy and how it can be modified. According to the IBM and University of St. Gallen's insurance survey[24] (see figure 13), approximately 70% of the respondents gave high importance to the competency level and know-how of employees.

We would assume the same to hold true in Asia as customers prefer financial advisor/ agent as the primary touch point which means that insurers and brokers need to ensure that their employees are customer centric and have the product knowledge to go with it.

Social value

This driver focuses on the demographic, socio-economic, and cultural background of the insurer's agents and other distribution channels such as financial advisors. Customers are more at ease speaking to an agent/employee from a similar background and with similar demographics such as age, sex, and level of education.

By engaging a diverse sales team to meet the needs of the diverse customer base insurers can identify customer's needs more precisely. The above strategy would facilitate building a long term relationship with the customer with great potential of cross and up selling opportunities.

The Two Sides of Customer Value

Customers are segmented into different categories based on two parameters of customer value:

* Value of customers to life insurance company

* Value to customers by life insurance company

Using the above parameters each customer can be bucketed in one of the four categories as shown in Figure 14.

Star Customers - These customers require high value in terms of products and services from the insurer and in return they provide high value to the company in terms of profitability, loyalty and less retention costs. These customers are the most profitable for the insurer as it is a win-win situation for both the parties.

Insurers should continue to provide them with personalized and quality service as well as product offerings, promotions, and loyalty programs as a way of showing their appreciation for the customer's continued loyalty.

Lost Causes - These customers do not generate high value from the products and services offered and do not provide high value to the insurer. Insurers can maximize profitability from lost customers by economies of scale and reducing costs and promoting efficiencies.

If the insurer is not able to move these customers to high profitability levels then the company should consider reducing its investments on these customers or may even consider dropping them. These customers could destroy value for the insurer.

Vulnerable Customers - These customers generate high value to the firm but they do not get high value out of the products and services. These customers are newly acquired and are unsure of the kind of products they want in their portfolio and may steer themselves to a competitor if unsatisfied with the product or service.

The strategy should mainly focus on improving the services and products offerings for these customers and providing priority service to help them become star customers.

Free Riders - These customers are opposite of vulnerable customers, they get high value from the product offering and services but are not profitable.

The strategy should be aimed at reducing the services to such customers or try to raise the price levels of the products associated with them; essentially the insurer should also try to move these customers to star customers.

Segmentation

Research in the insurance industry has segmented insurance customers into various types or categories based on the customer lifetime values generated from the lifetime value model and attitudes that drive those most. While there are customers that seek minimum to no contact with the insurer others constantly seek their insurer's advice and place a great deal of trust in the people of the organization. The IBM insurance survey on European customers mentioned in Figure 15 has categorized customers into five segments:

Relationship-oriented Individuals: These individuals consider the relationship with their insurer as the single biggest motivator while doing business with them. They expect the insurer to be transparent and provide complicated insurance products and jargon in simple lay-man terms. Rather than buying different insurance policies from multiple insurers, this customer segment prefers to do all their business with one insurer. This type of customer relies on advice from the insurance agent as much as he/she relies on advice from family and friends. Traditionalists account for 27.1%[28] of insurance customers and are the most popular customer type in Europe.

Insurers should ensure that this customer is given personalized attention by a team of employees who are experts at relationship management. Once the insurer is able to create and maintain the trust of the customer, there is tremendous potential for cross and up selling opportunities.

Support Seeking Individuals: These customers constantly seek the advice of external parties such as family, friends, and the insurance agent and place a great deal of trust and confidence in their expertise and advice. Though these customers desire uncomplicated and personalized products and services they also shop around and compare prices on the Internet. In Europe individualists make up 20.3%[29] of the insurance customer base.

Insurers looking for a slice of this pie need to market and capitalize on their employees' know-how and expertise and position itself as the market leader providing exceptional pre and post sales service to their customers.

Product Optimizers: As the name suggests, these customers seek the best product and not the service as the case with support seeking individualists. For the ideal and most convenient life insurance product, optimizers are willing to pay extra and also share confidential information with the insurer. These customers seek a strong brand name backing the product rather than just the people. In Europe, optimizers make up 26.7%[30] of the insurance customer base.

Insurers should strategically position themselves as ones with a superior brand with niche product offerings that will appeal most to the optimizers.

Price Sensitive Individuals: Unlike the product optimizers, price sensitive individuals require standardized products and go to extremes to get the best value for their money. They use the Internet exhaustively to shop around for the lowest price. However, it is possible that these customers are not fully aware of the variety of life insurance products and the benefits each has to offer; hence they settle for one that is low priced and standardized. Price-sensitive analyzers make up 17.6%[31] of the insurance customers in Europe.

Given an opportunity to discuss with price-sensitive customers and presenting them with the right options, without putting any pressure on them to buy, insurers may be able to up-sell from a standardized to a specialized insurance product.

Uninterested Minimalists: These individuals seek a quick entry and exit when buying an insurance product. Their interaction with the insurer is limited to the extent of the sale and they prefer not to be contacted in the future. Minimalists rely on the power of the Internet to give them the lowest price and policy and thus know exactly what they want. Because these individuals are so dependent on technology they expect complete transparency and quick and infrequent touch-points with the insurer. Uninterested minimalists make up 8.2%[32] of the insurance customers in Europe.

Insurers seeking to target this customer segment must have a strong online presence and an extremely powerful and use-friendly web portal.

Progressive Insurance was the pioneer in comparative analysis whereby potential customers seeking quotes were also able to see how Progressive's quote was positioned to that of its competitors. A spot on price comparison gave the minimalist assurance that they were paying the lowest price for a policy from Progressive. Segmentation Based on Customer Value

On the basis of the segments identified in the section “Two Sides of Customer Value”, the above customer mentioned customers can be bucketed under the four categories namely: Star Customer, Vulnerable Customer, Lost Cause and Free Riders. Distribution of customers segments in the four buckets is depicted in Figure 16.

The insurer should focus on creating strategies to improve profitability from support seeking individuals by providing them better customer service and product offerings. The goal should be to transform support seeking individuals to star customers.

Like-wise price sensitive customers should also be transformed to star customers. This can be done by reducing the services they offer to this segment of the customers or should increase the price of the product offering to improve their profit margins.

Insurers should also try to improve profitability from uninterested minimalists by economies of scale and at the same time generating efficiency in operations. If economies of scale do not exist, then the insurer should try to reduce this customer segment.

Table 1 is a summary of the five customer segments along with the key drivers and the strategies that can be adopted by an insurer to acquire and retain them.

Cluster

Relationship Seeking Individuals

Support-Seeking Individuals

Product Optimizers

Price Sensitive Individuals

Uninterested Minimalists

Key Driver

Service Quality, Relationship, Brand Image & Social Value

Service Quality, Relationship, Product, Brand Image, & Social Value

Product and Brand Image

Price

Price & Service Quality

Specific requirements from life insurance

• Rely on external expertise and advice • Want uncomplicated services • Want to be well covered by their insurance policy

• Rely on external expertise and advice • Trust people more than insurer • Want transparent, customized products and services • Willing to shop for the right product

• Are willing to pay an extra price for the product

• Are quality and brand conscious

• Seek no advice • Have knowledge of the required product. • Shop for best bargain • Want standardized products

• No future contact once sale is complete • Need quick service • Price sensitive customers • Desire transparency

Strategies to acquire and retain

• Personalized attention by a relationship advisor

• Marketing efforts should be focused on uncomplicated and transparent services such as online quote generation, policy comparison, online mid-term amendments

• Retain customers by cross and up selling

• Personalized attention by a relationship advisor to build trust.

• Marketing efforts should be focused on customized product and service offering at competitive price.

• Products should be promoted by banks to HNWI

• Marketing efforts should be focused on the quality of the product and service offering.

• Advertising the product and the brand image of company

• Marketing efforts should be focused on offers, discounts, and competitive product price

• Promote the product on the Internet

• Marketing efforts should be focused on product offering and customized service

• Develop competitive product pricing

• Promote the product on the Internet

· User friendly web platform

Success Factors

Trust, Transparency

Trust, Transparency

Trust, Technology

Transparency, Technology

Transparency, Technology

Table 1

Planning

The Planning component ensures that the information collected in the analysis phase is valid and relevant for determining the customer value. After the validity and relevance of the information is established, strategies at the business and product/market levels are formulated to increase the overall customer value for the organization. Campaign planning and its execution are driven by a varied set of questions at different levels in an organization. Let us look at the campaign planning and execution process at different levels of a life insurance company.

Planning in a life insurance company occurs at two levels of an organization:

* Business Level

* Product/Market level

Planning at the Business Level

Planning at the business level generally involves formulating strategies for identifying a target market and a portfolio of life insurance products tailored to the specific market. Upon analyzing the current scenario of the economy, an insurer can address the question “Where do we focus?”

To further elaborate on how an insurer can plan a long term strategy, let us take a closer look at two current issues in the South East Asian sub-continent.

Asia's Ageing Population: Mr Tan Hak Leh, Deputy President of the Life Insurance Association of Singapore (LIA) mentioned in the 6th Asian Conference on Pensions and Retirement Planning in Singapore that Asia's elderly population will outstrip the rest of the world in the next 40 years. The number of people above 60 years of age is estimated to quadruple by 2050 to 1.2 billion.[33]

Furthermore, a report published in 2008 by the National Population Secretariat of Singapore revealed that the percentage of people over 65 is steadily increasing. Singapore's population is reflected in the graphs below.

Therefore, insurers need to focus on product innovation and sales of retirement and annuity solutions for Singapore's growing ageing population.

Lack of Confidence in Asian Financial Markets: During a recent interview with an executive from a leading European insurer in Singapore, the gentleman mentioned that the Singaporean customer's buying trend of life insurance products post the financial crisis (since 2008) has started to change. According to him, the life insurance industry will observe a substantial increase in the sales of the term policies as compared to other “exotic” life insurance products in the mass customer segment due to the risk averse nature of the customer and lack of confidence in the financial markets. The fact that the average customer has developed a low level of confidence in the financial markets is further supported by a study conducted by HSBC. The study[36] surveyed 3,563 individuals in seven countries and territories in December 2009, namely China, Hong Kong, India, Malaysia, Singapore, South Korea and Taiwan and revealed the following:

As such, the insurer should focus on developing and marketing products that meet the protection requirements such as term life, accident, critical illness, disability etc.

Planning at Product/Market Level

The opportunities identified at the business level are then narrowed down to a particular market or a product. The business level strategy is converted in to an operational level strategy at this level. Product/market level planning involves formulating strategies to efficiently complete the task at a product or market level; for example strategies to launch a new or re-launch and old insurance product. The strategy for a product or a market is driven by a set of questions as mentioned below:

* What is the current position of the insurer?

* Where does the insurer want to be?

* How does the insurer get there?

The above questions are covered more in detail below:

What is the current position of the insurer?

To get a clearer picture of the current positioning with respect to its competition, an insurer can analyze various cost and revenue centers. One way of analyzing these drivers is by developing a Competitive Matrix which evaluates the insurer's performance with respect to its competitors on certain parameters such as:

Financials: To understand the current financial position, a life insurer can compare its growth in revenues and operating margins to that of its competitors. To get a better understanding of how the Competitive Matrix works, we selected a sample of five insurance companies and plotted them based on the growth in revenues and operating margin from 2005 to 2007. Our analysis revealed the following:

Looking at the competitive matrix in Figure 20, Great Eastern and AXA are positioned well in the market with high operating margin and high revenue growth and should deploy strategies to sustain their position. On the other hand, Prudential which has negative growth in revenues and also has low operating margins should deploy strategies to reduce costs and improve revenues.

Other parameters include -

Sales - By plotting operating margins to the number of policies sold per year on the competitive matrix, a life insurer (with respect to its competitors), can determine the effectiveness of its cross and up selling strategies. The higher the operating margins the higher are the costs in acquiring new customers which are not off-set by revenues generated from cross and up selling to existing customers.

Products and services - By plotting product line offerings to the customer satisfaction index on the competitive matrix, an insurer can identify the level of customer satisfaction for each product line with respect to that offered by its competitors. As most insurers offer similar products and service offerings, an insurer will be able to identify those products that are not profitable as compared to similar products offered by its competitors. To understand the reason for low satisfaction, the insurer can conduct a survey to obtain feedback from customers of the low ranked product and then improve the product and service offering.

Customers - Insurers need to understand their most valuable current and potential customer base before offering any new products or services to them. Insurers can use the competitive matrix to understand their current position in terms of customer service and customer profitability as compared to its competitors. The insurer can also evaluate the risk/probability of a customer moving to a competitor and should also evaluate the competitor's customer profile.

Marketing - After profiling the customers, products and markets, insurers can evaluate the effectiveness of current touch points. Marketing various products in the market is evaluated by sorting the data in the database systems based on questions such as “Where did you hear about us?” Once the information is collected, the insurer can focus on enhancing the low response channels and further strengthening the ones that have received a high response. Where does the insurer want to be?

This depends primarily on the organization's current propositions and future intentions in the market place, which may evolve from time to time. For instance, Prudential Singapore offers various products (see Figure 21) that meet the following needs of the customer:

It is essential for an insurer to continuously monitor the market place as customer's needs are always changing with the dynamic nature of the economy. Prudential is one such company which focuses on all the customer segments at various stages of their life cycle unlike Zurich Life Singapore which mostly caters to high net worth individuals. Prudential has a set of products which are based on the needs of its customers such as Protect and Save segment caters to the risk averse customers and Invest segment caters to the investment needs of its customers. How does the insurer get there?

To achieve targets, insurers should evaluate the opportunities in each market segment, current marketing channels, and the marketing mix. Additionally, metrics can be used to measure profitability from the customer and the insurer's point of view. Lastly, the insurer should adopt strategies to change the organizational culture by training its employees to be not just product centric but also customer-centric.

Market Segment: To evaluate the available value opportunities, the insurer creates a profit tree, highlighting the profitable branches. The tree also helps in understanding the bottlenecks in achieving the desired objectives. The insurer focuses on the various customer segments to promote its products and services tailored to the needs of the customer segment.

For example, an available value opportunity for the insurer in Singapore is to target the aging customer segment. The insurer should focus on the retirement plans for the aging population along with personalized customer management services such that the aging customer recommends the insurer to his family and friends. The insurer's long term strategy should be such that its customers become the seller thereby reducing the new customer acquisition cost.

Marketing Mix: Today, the average insurer has evolved from the traditional product based company to a service based industry and to improve profitability the focus needs to be on improving the experience of the customer at various stages of the customer's life-cycle using the desired touch-points.

As such, advertisements need to be strategically placed, brochures be informative and carry no hidden clauses, and products should be easily available through multiple channels such as online, financial advisors, brokers etc. [39]

Several insurers have also launched loyalty programs to acquire and retain customers. Based on our discussion with a senior representative from a leading European insurer in Singapore, the insurer provides bonuses to its policy holders who are registered with them for a particular product for a particular period of time. This has helped the insurer in retaining customers and improving the share of the wallet for the company.

Insurers can also use database marketing programs to improve the response rate from their marketing campaigns. Insurers can apply statistical models and scoring methods to identify and target profitable customers. These models can also be used to cross sell different products based on the customer's past buying patterns.[40]

Customer Focussed Metrics: Customer focussed metrics evaluate the product and service value to the users and include measures such as awareness, association, attitude, trial/usage, loyalty, and word of mouth referrals. These metrics should be given importance as they could lead to higher profitability. For example, before selecting between mass marketing and target mailing an insurer can perform a cost benefit analysis on the basis of response and conversion rates and cost per contact.

* The cost of reaching a thousand customers on the internet is about $5 as compared $200 for direct mailing. If the insurer considered only the cost per contact, online marketing is the clear winner however;

* Direct mailing has a response rate of 1% and the response rate for online marketing is even lower. As per some studies, one out of 200 customers click on an online banner advertisement and only one of the 100 end up buying the product.

* So if the insurer plans to target two million customers, online marketing would cost $10,000 and direct mailing $400,000.

* If the insurer considered only conversion rates, direct mailing would generate about 20,000 customers while online marketing would generate roughly 100 customers, which means the acquisition cost per customer is less in the case of direct mailing as compared to online marketing even though the cost per contact is lower for online marketing.

* On the other hand, if the insurer considered retention rates of each alternative with online marketing reaching 90% as compared to 60% from direct mailing, the CLV is close to $245 for online marketing and $69 for direct mailing. Therefore, in this case even with a high cost of acquisition, online marketing is a better alternative for the insurer.[41]

Organization Structure: The organization structure for a customer centric insurer should focus on the following:

* Customer-centric - Insurers need to change the organizational culture to become most customer centric and the product managers should also consider the customer while designing the insurance policy.

* Incentive Systems - The new incentive structure should reward employees on the basis of the following:

o Number of products sold to the customer by cross and up selling.

o Customer retention rate, which indicates the employee's ability and desire to provide quality service to the customer.

* Hiring and Training - Insurers should make it clear from the start of any employment contract that customer satisfaction is a critical factor in measuring an employee's personal and professional success. To reiterate the importance of satisfying customers, employees should be trained on a regular basis.

* Customer Based Costing - The accounting approach of the company needs to incorporate customer based accounting. In customer based accounting costs associated with customer retention and acquisition are allocated to each customer. An insurer should allocate costs based on the size of each customer account. The allocations of costs for large customer accounts are relatively higher because the customer demands a greater amount of resources from the insurer. Continuous Improvement

The Continuous improvement phase includes updating action plans and strategies to make it more efficient and effective to achieve the organizational objectives. The continuous improvement cycle is depicted in Figure 22.

The objectives of continuous improvement are achieved by:

· Continuous performance measurement: The performance indicators established in the planning phase should be reviewed on a periodic basis to avoid any deviations from the stated objectives and un-realistic forecasts and assumptions. In case of deviations in the measurement of key performance indicators, the insurer should evaluate its long term and short term strategies.

· Process Improvement: Based on the results achieved from the actions plans and performance indicators implemented in the planning phase, associated processes and action plans are updated to make the CVM strategy more efficient in achieving the stated objectives for the customers and the organization.

Primary Research Findings & Analysis

To validate our hypothesis regarding customer drivers, segments and trends in the insurance industry which we inferred from our secondary research, we circulated an online survey to customers who currently own an insurance policy from a Singapore based insurer. The questions in the survey were designed with the following objectives in mind:

* Identify key drivers for customers

* Primary purpose of purchasing an insurance policy

* Customers' perceptions of the insurer

* Sources of product information and most popular distribution channel through which the policy was purchased

* Level of satisfaction provided by the distribution channels

* Areas for room for improvement

* Customers' preferred touch points

* Average premium per policy and average number of policies owned by people in Singapore

The survey was circulated primarily to individuals working as professionals with multi-national companies in Singapore. Hence, there is a possibility of a bias in the overall survey result.

Sample Size: We received a total of 52 responses out of which 41 had purchased insurance policies in Singapore. The remaining 11 were eliminated from our sample as they did not have an insurance policy from a Singapore based insurer.

Residential Status: Of the 41 valid respondents, 37% were Singaporeans, 31% with permanent residential permits, and 20% and 12% were expatriates from Asia and Europe/Americas respectively.

Income Level: The majority (46%) of the respondents had an annual income between S$100,000 to S$150,000 and 20% earned S$50,000 or less.

Age: Of the valid respondents, the majority (41%) was between 21 to 30 years of age and 30% were between 31 to 40 years of age.

Average Premium Paid: Of the 41 respondents, only 31 responded to this question. Average premium paid by these respondents was S$3,075. This figure is on the higher end as one individual claimed to own three policies for which she paid a total of S$40,000/year in premium. If this customer were taken out of the analysis the average premium amount would come down to S$1,850/year.

Average Number of Policies/Person: Of the 41 respondents, 35 answered this question and the average number of policies is 1.5/person with two individuals owning four policies each.

Interpretation

In the Singapore market share of NTUC Income and AIA is close to 50%. The other major players in this industry are Great Eastern and Prudential (UOB) each having close to 15% of the market share. It can be inferred that the most sought after companies are those that have a going concern and have been in Singapore for a long period of time. Other insurance companies are Aviva, HSBC and Royal Skandia.

Interpretation

After the financial crisis of 2008 people in Singapore have become more risk averse and have started investing in protection plans such as term life, critical illness, health, and disability. Thus the prime objective of people in Singapore to invest in insurance is protection followed by savings.

Interpretation

It can be inferred that customers in Singapore place a high level of importance to the Image/Reputation of the insurer, Premium, Quality of after sales service, and the relationship with the agent/insurer/financial advisor as the key drivers prior to purchasing an insurance policy.

Furthermore, upon performing a bivariate-correlation analysis on the responses received for the key driver above revealed the following (see annexure for details):

* No significant correlation between the key drivers and background of the employees/advisors.

* High correlation between the quality of after sales service and the relationship with the advisor/agent/insurer.

* Image of the insurer is highly correlated with services offered, premium charged, relationship with advisors and transparency.

Interpretation

In Singapore most customers do not compare insurance offers from competitors after purchasing the insurance policy. Insurers need to develop incentives and marketing campaigns emphasizing the benefits of their product as compared to their competitors in order to acquire the competitor's customers.

Interpretation

Customers in Singapore rely on Direct Selling Agents, Friends & Relatives and Financial Advisors to gather information on insurance products. Apart from the above channels customers also get product related information from banks, Internet and TV commercials. Customers in Singapore recommend the insurance products to their friends and relatives. A customer's decision to purchase the product is influenced by the recommendation made by family and friends. Word of mouth marketing is one of the most effective channels to acquire customers.

Interpretation

The most important distribution channel is the insurance agent followed by the financial advisor. Though, insurers have entered the arena of bancassurance, this channel is yet to catch up with the traditional distribution channels.

Interpretation

While majority of the respondents were satisfied with the level of customer service provided by the bank agent/ direct selling agent/ financial advisor, there were still some customers that were not satisfied indicating further room for improvement. Additionally, 19 out of 31 respondents felt that their agent/advisor was approachable, courteous, flexible and knowledgeable indicating yet again that the customers always relied on them for knowledgeable advice at any stage of the customer lifecycle. The respondents that were not satisfied with the service indicated that their agent/advisor was either impatient and/or not transparent with them.

Interpretation

Though majority of the customers are satisfied with the level of service provided by the agent/advisor, they still believe that there is much room for improvement with regards to the after-sales service, turnaround time for processing claims, and transparency/trust. This fact is further supported by the findings from question 20 indicating that the quality of service provided by insurers can still be improved. Lower premiums, higher returns, knowledge and simplifying the contract agreements were rated as some-what important as majority of the respondents gave those attributes a rating between 6 through 8.

On the product front, there are a few customers that desire a wider range of product offerings and flexibility of bundling products from their current insurers.

A bi-variate correlation analysis on the responses received for the areas of improvement also reveal that customers link transparency and trust with the quality of after sales service and knowledge of agents/advisors. (see annexure for details)

Interpretation

The primary touch point for majority of the respondents is in-person, followed by telephone and email. The Asian insurance customer prefers meeting the insurance advisor/agent in person as opposed to the European/American customer who typically prefers email as a preferred channel of contact.

Interpretation

Customers are willing to recommend the services of the agents/advisors to their family and friends. If the agent/advisor provides quality service to their customers, it will further impact the insurer's ability to acquire new customers, lowering his costs of acquisition significantly.

Interpretation

Because 85% of the respondents in our survey (see survey question No. 12) do not compare insurance quotes from other insurers, they either disagree or are unsure whether their insurer's premium is the most expensive as compared to that offered by other players. Majority of the respondents agree that the product/s offered by their insurers is available through multiple channels of distribution, well advertised and appealing to their changing needs. Quality of service and quick response to queries are equally drawn as some customers are satisfied while others are not, which further supports the analysis from questions 19 and 20 above that there is still room for improvement with regards to these two aspects.

Competitive Profile Matrix (CPM):

Interpretation

From the results of our survey, we performed a CPM on the four insurers with the highest number of respondents, primarily AIA, Great Eastern, NTUC Income and Prudential. We then assigned weights to critical success factors and assigned Service Quality and Price Competitiveness with the highest weights as they are considered key drivers for customers in Singapore. The rating values were as follows:

1=major weakness, 2=minor weakness, 3=minor strength, 4=major strength

The CPM matrix identified AIA as the most competitive insurer in Singapore with a score of 2.9 and Prudential as the least competitive of the four with a score of 2.12.

Case Studies: Unlocking the Value of Customers

While the insurance industry in Europe and North America is saturated with an abundance of heavy weight players such as Allianz, AXA, AIG, and Generali to name a few, the same is not the scenario in the Asia Pacific region. Over the past decade the Asia Pacific region has witnessed a tremendous increase in the level of disposable income and has been identified as a potential market by insurers. As such, several international players are in the process of establishing (or already have) a strong presence in this largely untapped market either by mergers or acquisition or by forming a joint venture with a domestic insurance company or financial institution.

As competition intensified in the region, insurers face numerous challenges to acquire and retain new and existing customers. To identify the challenges faced by insurers in the Asia Pacific region we have presented three case studies of: ING Insurance Asia, HSBC Insurance Asia, and Reliance Life, India and discussed the challenges they faced, action plans implemented to counter the challenges, and the benefits they achieved as a result of the action plans. ING Insurance Asia Pacific

Challenge: ING Insurance Asia[42], a global insurance and financial services company with operations in Australia, Hong Kong, Taiwan, Japan, Korea, and Malaysia and seeking to expand its presence to India, China and Thailand faced several challenges in delivering new business solutions cost effectively and timely to its various target markets in the Asia Pacific region. This challenge had further escalated as ING grew bigger acquired millions of customers. However, they were unable to maximize the odds of cross selling to their customer base and competitors were picking up un-satisfied customers. ING identified that this was due to lack of consolidation of customer data which was spread across departments and legacy systems.

Solution: In order to get a holistic view of the company's customers and identify ones that were profitable, ING Insurance engaged a third party vendor to provide a service oriented architecture (SOA) data management system.

Results: In 2005, ING Korea was the first to deploy the data management system across its financial services and life insurance businesses. The data management system helped ING Korea in maximizing customer value in the following ways:

* One single view of the customer enabled the company to cross sell mutual funds and insurance policies.

* Faster time to market with more innovative products.

* Streamlined financial reporting and performance management enabling the company to identify its most profitable customers and highest revenue generating products.

The success at ING Korea snowballed to other local ING businesses in no time with similar cost reductions and increase in sales noted by several ING business units. Reliance Life Insurance Company Limited

Challenge: Reliance Life[43] was formed in 2003 as the insurance arm of Reliance - Anil Dhirubhai Ambani Group. The company has achieved the following since its inception in 2003:

* Captured a market share of 4.1% in the new business premium in India in 2007-2008.

* 1.7 million policies as of 2008.

* Total branch strength of 740.

Even though Reliance Life is only one of the two insurance companies in India with an ISO 9001:2000 certification it was facing intense competition from new domestic and foreign players.

Solution: To gain a competitive advantage in a growing insurance market, Reliance Life came up with the ‘Virtual Office'. This tool was designed to make the insurer more efficient and flexible by providing the customers access to their products, option to buy additional policies online, pay premiums, and print documents needed for submitting claims.

Results: The Virtual Office enabled Reliance Life in obtaining the following objectives:

* Improved customer service as customers had an option to self serve.

* Sales increased as agents had instant access to customer information.

* Time to market for new products decreased.

HSBC Insurance Singapore Pte Ltd.

Challenge: As a result of the financial crisis, several insurers in Singapore noticed a drop in new business premiums as investors either lost faith in the financial markets and the insurers ability to meet obligations. This statement is further supported by a survey conducted by HSBC in 2009, which revealed that 61% of Singaporeans lacked confidence in the Asian financial markets[44]. Therefore the challenge faced by HSBC Insurance was to sustain growth and ability to meet obligations.

Solution: While organizations in Singapore slowed down the launch of new insurance products and laid off their sales-teams and customer service personnel to cut back on costs resulting in poor customer service, HSBC Insurance[45] on the other hand did the exact opposite.

* The organization took advantage of the then present economic scenario and timely launched innovative products such as a guaranteed high yield single premium product when interest rates were low in early 2009.

* During the same time HSBC launched Jade Global Universal Life to cater to the needs of the high net-worth clients who were up for grabs as their previous provider was either bankrupt or was unable to provide the same level of service as it did prior to the financial crisis.

* Lastly, the organization also ensured that its Service Quality team was well positioned and trained to provide a positive service experience for customers.

Results: The organization achieved the following as a result of its timely launch of innovative products and strategies:

* A 70% increase in insurance premiums in the first half of 2009, which is a remarkable achievements considering that the Singapore life insurance industry as a whole contracted by 45% during the same period.

* A robust Customer Feedback Solution System enabled the insurer to track and resolve all issues and feedback effectively thereby creating a positive experience for the customer.

* As a result, in 2009, HSBC Insurance Singapore was awarded the Insurance Company of the Year Award[46] by the World Finance Insurance Company, coming ahead of NTUC Income, Great Eastern and AIA.

Best Practices in Customer Value Management

To gain competitive advantage, international and local insurers setting up shop in the Asia Pacific region are not just promoting and localizing their corporate strategies to adapt to the host countries but are also focussing on innovative business solutions that have over time become best practices of customer value management in the life insurance industry:

ICICI Prudential Life, India

The insurer has launched successful products such as Diabetes Care and Cancer Care, which were the first of its kind in the Indian insurance industry.

To ensure maximum penetration in rural areas, the insurer has also increased the number of distribution channels and has more than 3,000 touch points, one of the highest in the industry. ICICI Prudential Life is also the first to partner up with the Indian Postal Department, a state owned enterprise. This has resulted in overcoming the trust barrier, as people in certain rural parts of India still view multi-national corporations that are out to cheat and deceive them. Lastly, the insurer has made available policy documentation in local languages which has helped the company go a long way in building trust with its customers. In 2008, ICICI Prudential Life was awarded the Life Insurance Company of the Year[47] award by the Asia Insurance Review.

Life Insurance Corporate of India (LIC)

In 2009, in India more than nine million policies (more than half sold by LIC) lapsed as customers were unable to pay the premium in one lump sum. To win back lost customers and retain existing customers, LIC which is India's largest state-owned insurance company has taken the lead by allowing ex-customers whose policies lapsed within the past five years to pay the premium and interest on the lapsed policies in instalments rather than in one lump sum. This flexibility in payment option has been made available to existing customers as well[48].

Max New York Life, India

To cater to the needs of millions of Indians living in rural India, Max New York Life launched a product, Max Vijay. Max Vijay has already proven to be highly accessible and flexible, attributes which most insurers in India have overlooked or ignored in their quest to reach the masses. Launched in October 2008, the product now has average sales of 1,000 policies per day.

Some of the salient features offered by Max Vijay include minimum enrolment premium options US$20, $30, and $50, no compulsory time bound renewal, and customers can top up their accounts anytime with extremely low amounts. Another feature that has made the product extremely popular in rural India is the option to top-up premiums and register claims through selective retail shops in villages and small towns. Lastly, Max New York Life has tied up with IBM to develop handheld GPRS terminals for its sales agents. The terminals allow for instant updating of customer accounts and issue of premium and top-up receipts thereby saving both the customer and the organization time and precious resources. In 2009, Max New York Life was awarded the Innovator of the Year[49] award by Asian

Insurance Review.

Marsh Brokers Australia & New Zealand

In 2009, Marsh enjoyed a 12% growth in revenue from client services. During a time when Marsh's clients experienced a sharp fall in profits, Marsh responded by offering them new and relevant products such as Marsh Explorer a free online tool for risk assessment and MarshConnect, an online application which facilitates client interaction with the broker. Along with outstanding customer service the broker company received several referrals from clients such as Fitness Australia who referred the company to the Asian Academy of Sports and Fitness Professionals. Lastly, the company was a pioneer in the insurance industry when it launched the Asia Global Client Services (AGCS) model. This model provided the company's Asian client base with home country service and expertise on foreign markets and also connected them to agents fluent in the local language. Marsh received the Best Broker of the Year[50] award from 2005 to 2009 by the Asia Insurance Review.

Great Eastern Life Insurance, Singapore

To reduce paper work and number of errors in data entry, Great Eastern launched the Electronic Mobile Automated System EMAS[51], a management information system, which enables an agent on a field visit to enter the customer's information directly into a lap top. This prevents the agent from making errors in entering data from hard copy policy forms. Furthermore, the system also enables the customer to electronically sign the policy. Competitors of Great Eastern have tried to imitate the concept of EMAS, however they have not been very successful and have had to withdraw from its use. Insurance and Financial Practitioners Association of Singapore (IFPAS)

In 1996, IFPAS a professional association of 5,000 plus members from Singapore's insurance based financial industry raised S$1.5 million to build and equip IFPAS-NKF Dialysis Center[52] to provide affordable and convenient dialysis treatment to all kidney patients. This is one of the ways by which the Singapore Insurance Industry has shown its appreciation for the support it has received from the customers.

Private Sector Insurers in India

With over 70% of the Indian population under the age of 30, and 50% of that under the age of 20, private sector insurers in India have realized the segment's potential to generate substantial new business. As such, private players like ICICI Prudential and Aviva Life Insurance have deployed innovative channels besides mass media to reach out to children. For instance, ICICI Prudential has organized a cricket coaching camp and the National Geographic Smart Kid competition spread across 380 schools in 10 cities, and a two day program in rural areas that enable children to improve their communication and financial skills. HDFC Standard Life sponsors spelling contests and Aviva Life sponsors book exhibitions in schools and colleges across the country. All these initiatives are aimed at reaching out to parents who are concerned with improving their children's future prospects.

Kyobo Life Insurance Co Ltd, Japan

During the recent financial crisis, Kyobo Life experienced a sharp increase in lapsed policies as customers were unable to pay premiums. Understanding the specific needs of their customers in the wake of unforeseen market conditions, Kyobo life agreed to renew the policies of customers by providing them coverage at the same premium as was before the policy lapsed and also waived the accumulated interest component for the lapsed period. In 2009, Kyobo Life was awarded the Life Insurance Company of the Year[53] award by the Asian Insurance Review.

Common Mistakes in Implementing a CVM Strategy

Though insurers are quick to recognize the need for a CVM strategy and implement such strategies throughout the organization, it is important to view the process with an open mind rather than take a myopic view of its implementation. Some mistakes made by insurers while implementing a CVM based strategy include:

Ignoring Value to the Customers: Either due to pressure from stakeholders or management, a CVM strategy may alter from one meant to focus on the value to the customers to one that focuses on value of customers. In other words, the focus changes to “What's in it for the insurer?” Consequences of such a change in strategy can often result in unfulfilled and unrealistic forecasts which in turn spiral down to the customers resulting in mass defections.

One Size Fits All Strategy: That all customers in a market will be satisfied with the same average product. This results in delivering high costs of service to the least profitable customer while under-serving the needs of the most profitable customer. Similarly when insurers use the same cost effective distribution channels to serve all customer segments irrespective of the customers' preferences, it results in the misuse of resources and a largely un-satisfied customer base.

Ignoring the Customer Lifecycle: An insurer may assume that customers will rarely change and is unable to keep up with the customers' changing needs. This myopic view is often because the organization culture is risk averse when it comes to launching new products and testing new technology. The uncertainty and lack of knowledge translates into lost revenues as the insurer tends to focus only on the current customers at the expense of potential future customers.

Focusing on a Single Driver: By focusing on a single component of a product's value the insurer may end up losing the customer as that driver may not be the one that triggers the customer to stay with the insurer. This results in investing time and resources on a driver that may not be important to a customer, thereby creating lower levels of satisfaction and higher churn rate

Losing Sight of the Product: When management is obsessed with being customer centric it invests all its efforts and resources on the customer, often ignoring the product. This could have an adverse effect on the brand name as the market is flooded with products that are outdated. Even for an insurer that is customer driven, it must focus on building its brand and product portfolio to serve the changing needs of its customer base.

Recommendations

Following are the recommendations from our primary and secondary research initiatives:

Recommendation No.1: Focus on products that provide protection

With the aftershocks of the recent financial crisis still being felt in Asia, customers are likely to be more risk averse and look at insurance products from a protection perspective rather than as an avenue for investments. As such, customers will seek policies to meet their term life, critical illness, health, accident and disability needs. Therefore, insurers should promote such products very aggressively by identifying customers in its databases who bought investment linked policies and attempt to cross sell non-linked policies through a marketing campaign that highlights the benefits and features of such products.

Recommendation No. 2: Focus on retirement and annuity products for the elderly

With an increase in the ageing population of Singapore, there will be a significant rise in the demand for retirement products such as annuities and pension plans. As such, first insurers will need to use customer data integration techniques to identify those customers that are retired and/or close to retirement and then target this customer segment with a suite of retirement and pension plan products through the preferred distribution channel with trained experts on trust, transparency and relationship management.

Recommendation No. 3: Transform Support Seekers and Price Sensitive customer segments in to Relationship and Product Optimizers

Since majority of the insurance customers in Singapore are currently Support Seeking and/or Price Sensitive, insurers should aim at transforming these segments in to Relationship Seekers and Product Optimizers who are in fact the most profitable to the organization. This can be done by:

· Personalizing the product and service for customers that constantly seek support from agents/advisors;

· Reducing the level of free services to the price sensitive customers and educating them about the benefits of other insurance products; and

· Cross and up selling to both.

Recommendation No. 4: Compare competitor's products to attract their customers

One of the findings from our online survey revealed that majority of customers in Singapore do not compare insurance offers from competitors after purchasing the policy. In order to attract the competitor's customers an insurer can aggressively advertise the benefits of its own product line and run a comparison against that offered by its closest competition.

Recommendation No. 5: Focus on brand image and relationship with customer

As referrals by word of mouth are the most favored means of generating new business revenues and insurance agents the most sought after distribution channel in Singapore, insurers must ensure that they develop and continuously monitor and train their agents to be transparent, approachable, courteous and knowledgeable about products. In the long run the higher the number of referrals received from existing customers the lower will be the insurer's cost of customer acquisition.

Recommendation No. 6: Bancassurance as a potential distribution channel

While bancassurance is not a popular channel through which customers buy insurance policies in Singapore, we believe there is great future potential in this distribution channel due to the wide network of branches. Bancassurance has gained significant momentum and premiums for several insurers in Europe and North America and the same trend is noted in countries such as Singapore, China and India where regulations on distributions channels have started to liberalize.

Recommendation No. 7: Focus on maintaining trust and transparency with customer

Our analysis revealed that customers link trust and transparency with the quality of after-sales service and knowledge of agents/advisors. To ensure maximum customer satisfaction, senior management must funnel down the importance of being customer-centric to the sales-team and customer service representatives. To promote a customer centric approach, the insurance agent should be measured not only on the number of customers acquired per year but also on the number retained and cross and up selling of other products to them. Annexures

Discounted Cash Flow Model (DCF)

Calculation of projected cash flows uses discounted cash flow method (DCF), time-value-of money principles and mathematical principles to calculate the projected cash flows and cost of capital. “The DCF of a customer's future purchases minus the cost-to-serve the customer is called customer lifetime value (CLV).”[54] DCF method is described in the figure below.

Challenges and Assumptions in DCF Method

Challenges faced in calculating the customer lifetime value using DCF methods are as follows:

* Calculation of current and future purchase probability of life insurance customers.

* Predicting the attrition rate of customers, as there are no contractual binding on the customers.

To determine the costs associated with each customer, activity based costing can be used. Also a rough estimate of the costs can be calculated based on the historical costs such as marketing costs from a particular channel, salary of employees etc. The accuracy of the DCF method depends on the assumptions and the ability to accurately project the future cash flows.

Organization needs to select an appropriate number of years for the calculation of customer value using DCF method. Generally organizations project the customer value for five years to coincide it with their corporate strategy. Initial years have more impact in the overall calculation in DCF method, thus five year period DCF can be referred to as customer lifetime value. Particularly in life insurance industry the customer lifetime value is calculated beyond the realm of 5 years. Appropriate number of years and detail required depends on the required accuracy of DCF based decisions.

Assumption regarding discount rate also creates deviations in the value associated with each customer. Some organizations use same discount rate for each customer instead of risk based discount rate and some organizations use discount rate based on the credit standing. Norwich Union, an Aviva company in United Kingdom uses variable discount rates for each customer based on the credit rating. The customers with good credit rating are discounted at a lower discount rate vis-à-vis customers with not so good credit rating.

Based on the above assumptions and challenges the DCF value for each customer is calculated and the next thing organizations do is to identify, prioritize and target customers who are similar to the most valuable customers. Other approach that organizations use is to migrate existing customers to a higher customer lifetime value using various touch-points and marketing strategies.

Quantitative Technique using SPSS - Bi-variate Correlation

After consolidating the data obtained from the online survey, we used SPSS software to identify the level of co-relation among key drivers identified by the respondents. Our analysis was centered on the responses received to the following questions in the survey:

* When selecting an insurance policy what factors do you consider most relevant (on a scale of 1 to 10 with 10 being most important)?

* According to you, in which areas should the insurer work upon (on a scale of 1 to 10 with 10 being most important)?

Data has been analyzed using spearman's rho (bi-variate correlation). The correlation matrix of the above questions is shown below:

* When selecting an insurance policy what factors do you consider most relevant (on a scale of 1 to 10 with 10 being most important)?

* According to you, in which areas should the insurer work upon (on a scale of 1 to 10 with 10 being most important)?

The SPSS output file for the above analysis can be found in the file named “SPSS_Output.spo” (please note it can only be opened using SPSS software).

Online Survey Questionnaire & Coding Sheet

* The MS Excel file “Questionairre_Final.xls” contains the questions that were part of the online survey on customer satisfaction:

* The MS Excel file “CVM Coding File.xls” contains the results of the online survey, coding sheet, analysis, source data for SPSS analysis, and the Competitive Profile Matrix (CPM).

[1] Pease, Jeffrey. “Customer Value Management”, https://www.businessobjects.com

[2] Ibid

[3] For the purpose of this report we have defined life insurance companies as “insurer”.

[4] Direct-response marketing means the sale is made from the company direct to the customer without a face-to-face meeting. Black, K and H. Skipper. Life and Health Insurance: India: Pearson Education, 2005.

[5] Datamonitor. “Aggregators in UK Insurance 2008: A growing force”. https://www.datamonitor.com/store/Browse/?Ntt=Aggregators%20in%20UK%20Insurance%202008&Ntk=title

[6] Ibid

[7] Included 2,400 participants spread across UK, Germany, France, Switzerland, the Netherlands and Denmark

[8] Life Insurance Association of Singapore. “Life insurance sales bounce back in Q2”. https://www.lia.org.sg/Lia-TypeA.asp?id=434.

[9] Life Insurance Association of Singapore. “Life insurance industry sees good increase in third quarter sales”. https://www.lia.org.sg/Lia-TypeA.asp?id=439.

[10] American Productivity and Quality Center. “Customer Value Management and the Planning System”. https://www.apqc.org/portal/apqc/ksn/CVMandPlanning.pdf?paf_gear_id=contentgearhome&paf_dm=full&pageselect=contentitem&docid=106853

[11] Satyam Inc. “Customer, Value Creation through Analytics”. https://www.sasforum.com/anz/presentations/Customer%20Value%20Creation%20Using%20Analysis.pdf

[12] Ibid

[13] Radix. “Insurance Policy Management Software Solution”. https://rndinfo.com/insurance.html.

[14]Brockman, M and Oliver Halter. “Becoming a Customer-Focused Business - One Policy at a Time”. https://www.diamondconsultants.com/PublicSite/ideas/perspectives/downloads/CDI_Insurance_Diamond.pdf.

[15] Unknown Author. “The Perfect Balance”. https://www.sas.com/success/eurovida.html.

[16] Brockman, M and Oliver Halter. “Becoming a Customer-Focused Business - One Policy at a Time”. https://www.diamondconsultants.com/PublicSite/ideas/perspectives/downloads/CDI_Insurance_Diamond.pdf.

[17] Unknown Author. “Max New York Life - India”. https://www.sas.com/success/mnyl.html.

[18] Coalition Against Insurance Fraud. “How Big Is $80 Billion? (bigger than you think!).” https://www.insurancefraud.org/80_billion.htm.

[19] Unknown Author. “Preventing payment of fraudulent claims”. https://www.sas.com/success/hcsc.html.

[20] IBM Institute for Business Value. “Trust, transparency and technology: European customers' perspectives on insurance and innovation”. https://www-05.ibm.com/de/versicherungen/downloads/studie_vertrauen.pdf.

[21] Ibid

[22] Ibid

[23] American International Assurance (AIA). “AIA Launches "We Are Asia" - A Major New Regional Advertising Campaign”. https://www.aia.com.hk/eng/about/pressRelease090804.jsp.

[24] IBM Institute for Business Value. “Trust, transparency and technology: European customers' perspectives on insurance and innovation”. https://www-05.ibm.com/de/versicherungen/downloads/studie_vertrauen.pdf.

[25] Gupta, S and Donald R. Lehmann. Managing Customers as Investments. Wharton School Publishing, 2005.

[26] Ibid

[27] IBM Institute for Business Value. “Trust, transparency and technology: European customers' perspectives on insurance and innovation”. https://www-05.ibm.com/de/versicherungen/downloads/studie_vertrauen.pdf

[28] Ibid

[29] Ibid

[30] Ibid

[31] Ibid

[32] Ibid

[33] Asia Insurance Review. “Asia's ageing population problem as serious as climate change”. https://www.asiainsurancereview.com/pages/e-Weekly.asp?country=1.

[34] Singapore Department of Statistics. “Population in Brief - 2009”. https://www.singstat.gov.sg/stats/themes/people/popinbrief2009.pdf,

[35] Ibid

[36] Asia Insurance Review. “HSBC survey identifies financial fears in different Asian Markets”. https://www.asiainsurancereview.com/pages/e-Weekly.asp?country=1.

[37] Business Insights Inc. “The Top Ten Global Insurance Companies 2008”. https://www.globalbusinessinsights.com.

[38] Prudential Singapore. ‘Home Page”. https://www.prudential.com.sg

[39] Gupta, S and Donald R. Lehmann. “Managing Customers as Investments”. Wharton School Publishing, 2005.

[40] Ibid

[41] Ibid

[42] IBM. “ING Insurance Asia Pacific exploits new market opportunities with IBM Insurance Application Architecture”. Published: May 16, 2008. https://www-01.ibm.com/software/success/cssdb.nsf/cs/LWIS-7ENLNR?OpenDocument&Site=corp&cty=en_us.

[43]IBM. “Helping to Insure Information Accessibility at Reliance Life”. Published on April 23, 2009. https://www-01.ibm.com/software/success/cssdb.nsf/cs/CPOR-7RCSXQ?OpenDocument&Site=gicss67insu&cty=en_us.

[44] Asia Insurance Review. “HSBC survey identifies financial fears in different Asian Markets”. https://www.asiainsurancereview.com/pages/e-Weekly.asp?country=1.

[45] HSBC Insurance. “HSBC Insurance Singapore wins World Finance Insurance Company of the Year Award”. Published September 19, 2009. https://www.insurance.asiapacific.hsbc.com/1/PA_1_3_S5/content/inah/pdf/20090915wf_award_sg.pdf

[46] Ibid

[47] Asia Insurance Review. “Awards Winners of 2008”. https://www.asiainsurancereview.com.

[48] Asia Insurance Review. “LIC allows instalment repayments to revive lapsed policies”. https://www.asiainsurancereview.com.

[49] Asia Insurance Review. “Awards Winners of 2009”. https://www.asiainsurancereview.com.

[50] Ibid

[51] Based on interview with a Director of Great Eastern Life, Singapore on January 28, 2010

[52] IFPAS. “Out Gift of Life”. https://www.ifpas.org.sg/Events.htm.

[53] Asia Insurance Review. “Awards Winners of 2009”. https://www.asiainsurancereview.com.

[54] SAS Inc. “Customer Value Management: Are you customer focused or customer obsessed?” https://www.sas.com.

[55] SAS Inc. “Customer Value Management: Are you customer focused or customer obsessed?” https://www.sas.com.

[56] Going to distance with Telecom Customers - The McKinsey Quarterly, 2003 Number 4

[57] Customer Value Management: Are you customer focused or customer obsessed? - SAS Report.

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