Insurance companies: Could you reduce policy lapse rates by 12%-30% through customer communication?
It’s often said that the key to every successful relationship is good communication. And that certainly includes relationships between companies and their customers.
At Riverside, we consistently see that customers who receive relevant, highly personalised communications from their insurance company have significantly higher retention rates than customers of the same profile who aren’t contacted in that way.
In fact, the communication programmes we run with insurers typically deliver a reduction in policy lapse rates of between 12% and 30% across all customers included, compared with those not included. The table below provides some examples.
Reduction in policy lapse rates
|Lapse rates: customers included in communication||6.8%||2.8%||5.2%|
|Lapse rates: customers not included||7.7%||4.0%||7.0%|
|Percentage reduction in lapse rates: (included vs not included)||12%||30%||26%|
Every programme that we run also includes a personalised sales offer – with converted response rates usually ranging from 10%-30% of all customers included.
Our experience in this area is based on the fully proven algorithmic models that we have built through analysing over 35 million unique customer records. All in all, we have clearly shown that communicating effectively with customers can significantly boost retention rates, sales and overall profits for insurance companies around the world.
New opportunities from digital development.
In today’s “always on” digital world, customers increasingly expect to receive relevant, personalised communications that offer real value. And the ongoing explosion in digital channels is yielding ever larger volumes of incisive “real time” data that enables businesses to deliver exactly the right message to the right customer at the right time.
At Riverside, we see vast new opportunities ahead for insurance companies around the world to boost customer loyalty and sales in the new digital landscape.
So much so, in fact, that we’ve produced a new guide to help you focus on how those opportunities could apply to your insurance business. Please see below.