Analytics can predict which customer needs to be contacted to ensure that their renewal premium is paid on time
Even before a life insurance policy is up for renewal, the officials at Tata AIA Life Insurance are looking to improve the rate of renewals and ensure that the policyholders pay premiums on time.
In an interaction with Moneycontrol, Yusuf Panchmariwala, SVP and Head of Operations, Tata AIA Life said that using predictive analytics, they have been able to ascertain which customer needs to be reminded about the payment of the renewal premium and who will pay it by themselves.
“Whenever a customer buys a product, we track the persistency of the policy very closely. By using analytics, we are able to find out the likelihood of a policy getting lapsed and ensure that the customer pays the renewal premium on time,” he added.
Typically, life insurers send text messages and also make calls to all policyholders one month from the date of renewals. They send follow-up texts, irrespective of whether the premium has been paid or not. Tata AIA Life, on the other hand, only follows-up with those customers who are likely to forget the premium payment date.
Predictive analytics refers to the practice of extracting/analysing information from a set of existing data in order to effectively predict future outcomes of an event. This will mean taking into account a policyholder's past payment data and similar information to gauge whether or not a they will pay the renewal premium on time.The life insurer has seen an improvement in persistency through these initiatives. The persistency ratio (by premium) improved to 83.55 percent for the April to September 2018 period, compared to 81.7 percent in the year-ago period.