Customer Retention |
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Research has shown that a 5% increase in customer retention leads to a 25-95% increase in company profits. It has been routinely observed that it takes many months if not years to recover the cost to acquire a new insurance customer, with estimates ranging from a low of 18 months to a high of five years. Also, the business that has been on the books for more than a year tends to be significantly more profitable than business that is in its first year of coverage. Because of this, insurers need to place great emphasis on retaining customers.
Fractal’s customer retention solutions enable insurance companies to take proactive measures to identify customers at high risk of attrition and develop counter strategies to retain them. Effective retention means retaining the right customers, not every customer. Spending precious resources to retain marginally profitable or unprofitable customers will hurt the overall value of the customer base. We use advanced analytics techniques to help insurers identify the right customers to be targeted for retention. We then deploy effective segmentation strategies to detect a customer’s propensity to attrite, identify their cause of attrition and then recommend effective customer retention strategy.
One well-known factor that has a positive influence on customer retention is the number of insurance products a particular customer holds. Armed with this knowledge, Fractal helps insurers develop cross-sell strategies which is a great way to retain customers. We help insurers design discount programs with lower premiums for multi-policy households.
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