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New research into the profitability of the general insurance sector in the UK claims profit per customer rose 51.3% in 2006 to £35.10 from £23.20 in 2005.
According to the research, the general insurance industry delivers the highest growth in profit per customer but the lowest absolute return per customer when compared to other UK Industries and in Europe.
The research claims the recovery of the industry, in terms of growth of profit per customer, is the result of better underwriting loss containment, plus improved customer relationship management.
Andrew Greenyer, vice president international marketing, Pitney Bowes Group 1 Software commented: “Most marketplaces in the UK economy have become more competitive over the last couple of decades. Former state or regional monopolies have deregulated. UK Banking has simply become more crowded. And for every bricks-and-mortar business on the high street, there is an online equivalent (with lower overheads). This has made companies very focused to two things: first, to ensure that they provide such a good proposition for customers that they stay, increase their spend (if possible) and become more profitable; secondly, to understand better the cost of winning, keeping and growing customers, so that value is returned to shareholders. The study confirms that banks are benefiting from their investment in customer relationship management (CRM) from the late 1990s onwards”
