There’s no doubt that mid-term policy cancellations cost money and are a particular challenge for the insurance broker community, already operating on slim margins in the insurance market. By the time a customer decides to cancel their policy, the insurance provider has incurred marketing and admin costs, as well as price comparison website fees in many cases. Additional costs come in the form of bad debt and just the lost opportunity to secure future business and a full year’s premium from that customer.
In this presentation Stuart Goldsmith, Product Manager, LexisNexis Risk Solutions, shows our research into the cost of cancellations and the power of data in predicting cancellations.
In this video you will learn about:
- The scale of cancellations in the UK motor insurance market, and the costs
- The impact on an example insurance provider with 100,000 policies and a typical 5% cancellation rate, with cost of a cancellation at £25 to £75 per cancelled policy
- How to measure, and by how much, certain risk attributes are useful in predicting policy cancellations (such as past cancellations)
- Insights from LexisNexis Quote Intelligence in predicting cancellations
- Consumer-led or broker/insurer-led cancellations
- The timing of cancellations across all times of the year
- How we modelled cancellation rates from the lowest risk to the highest risk deciles
- How to apply this data to achieve a high quality book of business, through accurate pricing and screening for higher risk customers.
Follow the link to the LexisNexis Risk Solutions website for UK & I insurance to find out more about how we support insurers.