Customer retention is at the heart of many businesses, and insurance is no exception. When a leading insurer realized that about 60 percent of the customers who purchased policies in previous years had allowed them to lapse, it sought a way to change that trend. The insurer wanted to improve retention by creating targeted messaging and programs for at-risk customers. But achieving that goal required more accurate data and customized scripts for these customers than the company possessed. The company turned to Cognizant for help in understanding not only which of its customers were most at risk of canceling their policies but also why.
Using the Cognizant value solution, we developed analytical models for all 4.5 million of the insurer’s customers to discover which insurer, agent and customer behaviors signaled a high risk for policy lapse. Among the insights the models revealed frequent interaction with an agent and completed medical examinations suggest a lower risk of lapsing.
Our analysis isolated the insurer’s at-risk customers with the highest net worth and the greatest risk of lapsing. We then helped the company develop specialized scripts to use in interactions with these policyholders. In addition, we customized the solution for use with new clients, comparing their profiles to those of existing customers to help agents understand a prospect’s risk level from the beginning of the sales process.
A better focus on the most important customers, based on their value to the company, means the insurer can proactively protect those relationships. Agents can also advise new clients more effectively by using the profiles of similar customers to reduce the risk of attrition over time. This information better equips call center agents, too, as they respond to customers’ specific needs in real time.
increase in premium revenues in just one month
of customers lost in the previous year were recovered
return on investment within first year