Axtria Insights

Axtria Insights

CASE STUDY
An Insurance Carrier Deployed Predictive Models to Better Manage the Retention of In-Force Policyholders

Situation

An insurance provider was spending significant resources in trying to retain unprofitable customers calling to cancel existing policies.



Challenges

Lack of understanding of customer value resulted in a non-differentiated approach where every call was answered by a customer service representative.



Approach

Developed and deployed predictive models that routed low-value customers to an IVR and focused expensive customer service resources on valuable customers

  • Internal and external data assets were combined to profile and value customers, and to evaluate alternative scenarios

    Insurance Carrier Deployed Predictive Models For Retention Of In-force Policyholders

  • A predictive model was designed to predict retention probability on a cancellation request call, based on past data on call history and a host of known customer characteristics

    Insurance Carrier Deployed Predictive Models For Retention Of In-force Policyholders

  • Predictive elements of the Retention model

    Insurance Carrier Deployed Predictive Models For Retention Of In-force Policyholders



Result

Improved profitability by reducing customer service costs by 25% and still retaining over 90% of at-risk revenues.

  • The analysis revealed significant effort was invested in unprofitable customers that were very unlikely to be retained

    Insurance Carrier Deployed Predictive Models For Retention Of In-force Policyholders

  • Based on subsequent profit maximization analysis, 35% of lowest expected value calls were routed to an IVR system.  Retained at-risk revenue diminished from 40% to only 37%, overall program profitability improved over 15%

    Insurance Carrier Deployed Predictive Models For Retention Of In-force Policyholders