Will loyalty programs for Life Insurance work ? Airlines , Hotels and General Insurance offer incentives to exisiting customers .

I agree.  Loyalty bonus should be ushered in very fast into Life Insurance.  This will make the policyholders more loyal to the company and vice versa.  The servicing of policy holders will also get a make-over.

In general it will improve the retention of the customers in the company.

I have to say that this loyalty programs originated aborad where they have high value for currency. In US even a student commuting between University and Home can subscribe to a frequent flier program. It is because the Airline fares are cheaper than most other forms of transport like road, Greyhounds etc;. This because they have good high way system which can give them that choice of a leisurely drive or a scenic travel in a Greyhound which are costlier than Plane. We with our low value currency only a handful of people can afford frequent flier programs leave alone students and other types of travellers.

Moreover look at the other types of promotions like a buying a mobile phone and getting a free vacation somewhere else. Here too the cost and the risks are taken into consideration before it is offered. Whoever is offered has to work the schedules at the behest of the company offering the package and at their time frames. Only retired people and those who have free time can access this and the promotion goes wasted for the cutomer.

I feel these promotions imported from abroad is of no use to the ordinary consumer who will never be able to use it or has to forfeit it for want of time and convenience. A plane fare between NY and LA costs only 200 dollars which is 3500 miles apart where as with lower cost of operations Indian planes charge around 15000 between Kochi and Delhi. One might get apex fares but only at the Airlines convenience. In summer a flight ticket two way between NY and London costs only 120 dollars which is promotion working.

The modern risk management in desigining promotions has made it of no value to the consumer.

The days when a loyalty program meant awarding a free sandwich for every six sandwiches a customer paid for are long over. Companies need to look beyond the "sandwich" program.

We should also understand that Loyalty programs are an expensive proposition & it should be carefully established by taking care of all the pitfalls. The main reason why other loyalty programs fail is that they are trying to encourage future behavior, they want customers to buy more versus rewarding past behavior. Here we need to balance things.....

I have to agree with Devaranjan on what has proposed or after stipulated years of continuous coverage, a longevity discount should be applied to their insurance policies....

Its really a very very important tool worth actioning.

A loyalty programme can actually go a long way in making the people pay the renewal premiums and also make HNI go for regular premium products than that of SP plans.

Now the question is why should one extend such a programme for Insurance Customers where a person stands to forfeit his premium in case on a lapsed policy?

The answer is that once a customer has brought a policy from company X and he has got loyalty bonus points then these points can be claimed by the customer while paying the next instalment premium or can be reimbursed in terms of reduced premium while going for another policy from the same company or it can be credited to his final maturity benefits in case of endowment plans.

The loyalty points as defines will definitely increase the loyalty of a customer for a particular company

The reason is that in v