In short

• Data shows that APAC consumers are loyalty program enthusiasts, but successful programs require leadership buy-in and a deep level of customer understanding.
• Programs that reward risk-averse habits can benefit insurers through customer retention and the potential for fewer claims.
• Loyalty programs present costs and challenges that must be carefully managed and clearly communicated.

In a competitive insurance industry, loyalty can be hard won. Given the rising cost of living and soaring customer expectations, insurers can risk losing customers unless they offer a compelling reason to stay.

Loyalty programs are widely viewed as powerful tools for driving customer growth and retention, but do they really work and what are the key ingredients for success?

Data from global public opinion company YouGov shows 72 per cent of APAC consumers are loyalty program enthusiasts who subscribe when given the opportunity.

At their best, the programs can strengthen customer relationships through tangible, personalised rewards and help to reduce claims by encouraging risk-averse habits, such as safe driving or a healthy lifestyle. At their worst, they can be a costly exercise, with minimal customer buy-in.

Adam Posner, founder and CEO of customer loyalty consultancy The Point of Loyalty, says successful programs share several common traits.

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