Making each customer contact pay off is possibly most important for life insurers because, unlike their financial services brethren, life insurers dont have as much direct contact with customers. I just think the business model is different for insurers than other types of industries, says Tyniec.

Due to the limited contact points, he says, insurers must do a better job with their customers. The costs of those contacts are difficult to compare, though, even within an industry that shares a lot of commonality, such as life insurance and annuities. The cost to service a life insurance policy is nowhere near the cost of servicing a variable product, Tyniec says.

Insurers are noted for sitting back and watching other industries move ahead with technology, but Tyniec believes that inactivity has more to do with the nature of the industrymanaging riskthan anything else. The insurance industry is wary of expensive IT projects, he says. Insurers dont tend to be leading edge, but they are not that far behind the others. I dont believe the competitive strategy for insurers is to leapfrog the competition with technical advancements.

The data compiled doesnt reflect the economic downturn of the past year, says Tyniec. Turnover rates increased from 7.4 percent in 1999 to 12.6 percent in 2000. Im not sure we would see the same kind of result this year, Tyniec notes. I suspect people feel kind of vulnerable and are not as eager to jump to another job.