Customer Retention in Life Insurance: A Conceptual Integration of Service-Dominant Logic and Subjective Expected Utility

Abstract

 Purpose:   Existing life insurance customer retention frameworks mostly use relational perspectives or economic decision-making models, which offer limited explanation of how customer engagement processes translate into retention decisions under uncertainty. Addressing this gap, this study integrates Service-Dominant Logic (SDL) and Subjective Expected Utility (SEU) theory to explain how co-production affects customer retention through trust and loyalty. This model incorporates co-production and customers’ subjective evaluation of long-term retention decisions.

Design/methodology/approach:  Using a conceptual research design, this study synthesizes literature to integrate SDL and SEU theories. This integration forms a unified framework, which in turn provides the foundation for the developed propositions.

Findings:   The conceptual synthesis identifies co-production, trust, and loyalty as the central mediators of customer retention. These constructs form a bridge between SDL's relational perspective and SEU's calculus for decision-making under uncertainty.

Originality:   This paper pioneers a novel theoretical integration by triangulating Service-Dominant Logic (SDL) and Subjective Expected Utility (SEU) theory to re-conceptualize policyholder retention. This synthesis addresses a foundational gap, bridging the relational focus of SDL with the cognitive calculus of SEU to provide a more complete explanation of retention drivers.

Implications:   By providing a clear pathway for empirical validation, this framework delivers dual value: it advances theoretical discourse on customer retention while equipping insurers with actionable strategies.