India's largest platform and marketplace for GCCs & AI

Sign in

India's largest platform and marketplace for GCCs & AI

3AI Digital Library

Minimizing Policy Attrition

3AI August 16, 2020

Leading Life Insurance Company In Japan

Problem Statement

  • A high attrition in the customer base due to competition and miss-selling (45% is overall lapse rate)
  • Expectation was to build an approach to retain policies and to set up an early warning system to identify a potential attrition cases to prevent further revenue leakage

Analytics Led Approach

  • Attrition trends in the data over the years were analyzed and an approach was designed to provide a solution to contain further revenue leakage
  • Predictive attrition model was built to predict the propensity of policies to attrite
  • Given are high level process steps which were followed :
    • Data Load Exploration
    • Model variable Creation
    • Analytical Model Development
    • Business rules

Business Impact

  • Raw data was mined, and a methodology was built for developing a predictive attrition model to provide a probability score to influence the decisions to follow the case by the customer.
  • Model output was segmented to optimize the approach to follow the case and provided insights to treat each policy based on the segmented matrix Re-evaluate;Retain;Grow;Protect– for example, Retain is the quadrant high value and high risky policy, retaining such policies will optimize the effort as well as cost
  • Primary users, retention team were provided with insights for customer retention..

Critical Success Factors

  • 20% of the in-force portfolio has been identified with 69% of the premium to be at risk of attrition (Approx. $ 1.3 BN premium at risk)
  • Formulated a growth strategy to retain existing customers as well as grow their business
  • Integrated attrition prediction with every customer touch point system through a web service

    3AI Trending Articles

  • Driving AI Adoption: An 8-Step Blueprint for Your Team’s Success

    Featured Article: Author: Ganes Kesari, Innovation Titan A Telecom major was grappling with high customer attrition. The firm was one of the largest Telecom companies in the world and a market leader in Asia. The marketing team’s heuristics-driven approach to customer retention was dated and ineffective. Reviewing the business performance in a weekly huddle, the […]

  • What if AI scans legislation and allocates funds to agencies?

    New Treasury Department software points the way. But research suggests that it’s impossible to show that an artificial ‘superintelligence’ can be contained . If, like me, you’re worried about how members of Congress are supposed to vote on a stimulus bill so lengthy and complex that nobody can possibly know all the details, fear not — the […]

  • Upskilling into AI

    Featured Article: Author: Puneeth B C, Computer Vision Specialist, Airbus India AI has penetrated our lives in a way that sometimes we don’t even realize. Devices and applications we use, are becoming smarter every day. An AI system knows more than what we know of ourselves. It is faster and more accurate than us in […]

  • Global Captive Centers – The true enablers of Collaboration (Part-2)

    Featured Article: Author: Vinodh Ramachandran, Neiman Marcus Group In my previous article, I had spoken about some challenges due to a siloed working model within data & analytics teams in large retailers and how setting up a Data & Analytics CoE within the GCC can be a good solution. Lets look at a few ways […]