An insight into how life insurers can retain their customers by using persistency management framework
The life insurance industry is suffering from high policy lapsation rates the world over. The U.S. market, which is the barometer of global insurance markets and the world’s largest insurance market, witnessed a declining life insurance policy growth rate as well as a steady lapse rate from 2000 to 2010. Combined, these two situations have created a problematic persistency trend for insurers on a global scale. One reason for this trend is that current practices for policy management are outdated and ineffective for today’s insurance climate. In this paper, we introduce a new persistency management framework to help manage and improve lapsation rates while increasing innovation and efficiency.