Go The Extra Mile To Please Customers
Monday, June 12th, 2000 Risk ManagementDelighting customers is good business because it is profitable. Delighting customers is profitable because it raises retention and referral rates. Higher retention is profitable because the expenses and claim costs associated with renewal business are materially lower than those related to new business. Given a premium growth objective, higher retention means more renewal premium, less new business premium, lower combined ratios and higher profits. Similarly, getting more referrals is profitable because close rates usually are higher on referrals than on non-referred business. In other words, there are fewer failed quotes, which tend to be expensive. In addition, referred customers often have better loss experience than non-referred accounts.
