Predict Policy Churn For New Customers

Business Problem

Insurers across all policy types and geographies know that, if there’s anything they have in common, they operate in highly competitive markets. Regardless of whether insurers rely on agents, customer acquisition remains costly when it comes to sourcing prospects and turning them into paying members. A competitive market and complex sales environment translates into high costs of customer acquisition where P&C Insurers pay up to 15 percent in commissions on the first year of premiums sold. For Life Insurers, this can go up to more than 100 percent. While these costs are justified when they are able to develop long term relationships with customers, insurers lose out if the member churns within the first year because the cost of acquiring them would exceed their lifetime value. Alongside churn for renewals, churn for first year members is a large expense for any insurer.

Intelligent Solution

AI helps you ensure the long term profitability of incoming members by predicting in advance whether a prospect will churn within the first 12 months of a policy application. This allows your underwriters to thoroughly review the quality of prospects that are being generated by agents. Insurance companies are deploying AI into the field where their underwriters and agents are now able to prioritize the prospects they invest their time on, focusing first on the prospects that have the highest value and lowest risk of churning prematurely. Based on the data available on each prospect, AI also informs them of the top reasons why a prospect is likely to churn or be retained, equipping them with the ability to personalize their approach with every prospect.