The Opportunity:

In a highly-competitive industry characterized by saturated markets and consumers viewing everyone as the same, the key to stable, sustainable growth, isn’t new policies alone. Perhaps even more critical is customer retention; contract renewals fueled by customer satisfaction. Higher renewal rates allow insurance companies to not only stay ahead of the competition, but to dramatically increase profits. Over a quarter of century ago, Reichheld and Sasser revealed in 1990 just how much: A reduction in customer defections of just 5 percent can boost profits anywhere from 25% to 85%. It’s only grown since.

What’s needed is the ability to better identify and predict the at-risk policyholders likely to defect, those most likely to stay with their policies and to determine the factors behind both. Possessing this information gives insurance companies a dramatic competitive advantage, guiding smart customer service driven sales outreach, to retain and upgrade policies.

The Challenge:

The challenge is building models to predict policyholder retention using internal data from the company that identifies and then leverages the critical factors that predict policyholder retention. Harnessing this powerful information gives Datatics clients data-driven insight to keep at-risk policyholders happier, avoid customer erosion and even upgrade more often.

Datatics Solution:

Our team works with you to gain deeper understanding of your internal company data. After cleansing the data for accuracy and integrity, we explore the use of dimension reduction techniques, to refine and resize with focus on the most important variables. Then we design and implement a predictive model tailored to your needs, examining different predictive and machine learning techniques and selecting models based on the accuracy of the out-of-sample prediction and the ability to most efficiently interpret results.

Our analysis will identify the most critical factors helping to predict policyholder retention, providing a foundation to refine everything from product offerings to sales and customer service. Results and findings are provided as easy-to-use and understand high-value summaries and tools.