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can be done by:

· Personalizing the product and service for customers that constantly seek support from agents/advisors;

· Reducing the level of free services to the price sensitive customers and educating them about the benefits of other insurance products; and

· Cross and up selling to both.

Recommendation No. 4: Compare competitor's products to attract their customers

One of the findings from our online survey revealed that majority of customers in Singapore do not compare insurance offers from competitors after purchasing the policy. In order to attract the competitor's customers an insurer can aggressively advertise the benefits of its own product line and run a comparison against that offered by its closest competition.

Recommendation No. 5: Focus on brand image and relationship with customer

As referrals by word of mouth are the most favored means of generating new business revenues and insurance agents the most sought after distribution channel in Singapore, insurers must ensure that they develop and continuously monitor and train their agents to be transparent, approachable, courteous and knowledgeable about products. In the long run the higher the number of referrals received from existing customers the lower will be the insurer's cost of customer acquisition.

Recommendation No. 6: Bancassurance as a potential distribution channel

While bancassurance is not a popular channel through which customers buy insurance policies in Singapore, we believe there is great future potential in this distribution channel due to the wide network of branches. Bancassurance has gained significant momentum and premiums for several insurers in Europe and North America and the same trend is noted in countries such as Singapore, China and India where regulations on distributions channels have started to liberalize.

Recommendation No. 7: Focus on maintaining trust and transparency with customer

Our analysis revealed that customers link trust and transparency with the quality of after-sales service and knowledge of agents/advisors. To ensure maximum customer satisfaction, senior management must funnel down the importance of being customer-centric to the sales-team and customer service representatives. To promote a customer centric approach, the insurance agent should be measured not only on the number of customers acquired per year but also on the number retained and cross and up selling of other products to them. Annexures

Discounted Cash Flow Model (DCF)
Calculation of projected cash flows uses discounted cash flow method (DCF), time-value-of money principles and mathematical principles to calculate the projected cash flows and cost of capital. “The DCF of a customer's future purchases minus the cost-to-serve the customer is called customer lifetime value (CLV).”[54] DCF method is described in the figure below.

Challenges and Assumptions in DCF Method DCF方法的挑战和假设
Challenges faced in calculating the customer lifetime value using DCF methods are as follows:

* Calculation of current and future purchase probability of life insurance customers.

* Predicting the attrition rate of customers, as there are no contractual binding on the customers.

To determine the costs associated with each customer, activity