This PPT slide, part of the 89-slide Customer Loyalty PowerPoint presentation, focuses on 2 critical metrics that influence profitability within the insurance sector: the Expense Ratio and the Loss Ratio. The Expense Ratio measures the relationship between operating expenses and premiums. It highlights a stark contrast between new and long-term customers, with new customers averaging an expense ratio of 67%, while those with a decade of tenure see this drop to 23.5%. This significant difference suggests that established customers require less intensive resources for underwriting and claims processing. The slide notes that familiarity with customer histories allows insurance clerks to make quicker and more informed decisions, thereby reducing operational costs.

The Loss Ratio, on the other hand, reflects the proportion of accident payouts relative to premiums collected. New customers face a loss ratio of approximately 88%, which decreases to 65% for those with ten years of tenure. This trend indicates that newer customers tend to experience more accidents, leading to higher payouts and, consequently, higher premiums. The slide further explains that as customers accumulate claims, they often seek lower premium options, which can impact the insurer's profitability.

Understanding these ratios is crucial for any insurance company aiming to enhance customer retention and improve overall financial performance. The insights provided can guide strategic decisions on customer engagement and operational efficiencies, ultimately leading to more sustainable profitability.

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Customer Experience Customer Loyalty Customer Retention