More ways to say yes: reducing lapse rates with DecTech
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One of the biggest growth opportunities for the life insurance industry is right under our noses in the form of existing customers. Applying data analytics and behavioural methodologies, we can reduce lapse rates and create more value for those customers and ourselves.
Traditionally, companies have tried to learn why their customers lapse simply by asking them, but these surveys have generally failed to yield actionable information. Customers often throw away letters or delete emails from their insurers even when they have an active policy, so after leaving they have even less reason to respond. Plus, we can’t be certain that people are always giving honest answers when taking a survey.
So to better understand why people lapse or surrender their policies, the Swiss Re Inforce Solutions team and Behavioural Research Unit teamed up with Decision Technology (DecTech) to observe customer behaviours. Using behavioural survey methods to conduct both qualitative and quantitative research, we uncovered some fascinating results that could impact the industry.
While we found that lapses are associated with life events or financial hardships, which is no surprise, the open text responses provided additional context which has in turn inspired more creative thinking. Armed with these findings, we are working with our clients to increase persistency in their portfolios.
We then conducted online behavioural experiments to determine if particular interventions can influence people who are likely to let their policy lapse. The results of this work will shape our recommendations going forward.
Leveraging behavioural insights is one of many ways Swiss Re is improving the experience for customers and the financial performance of our clients. It’s a situation where everyone wins and outcomes include:
- Reduced lapse rates
- Improved mortality
- Increased cash flow
- Freed-up capital to deploy elsewhere for growth
- Increased customer retention and loyalty
- New up-sell and cross-sell opportunities
As we continue to test and learn in this space, we expect to further improve the effectiveness of our inforce customer experience solutions.
Interested in learning more? Contact us to learn how we can work together to uncover insights in your inforce portfolio.