Month: January 2018

Improving lapse predictions (sigma 6/2017: LIFE IN-FORCE MANAGEMENT)

Data analytics – descriptive and predictive – can be used to improve retention of inforce business in several ways. Statistical models can be applied to investigate and better understand who lapses and why, using data systematically collected from different sources beyond traditional policyholder information. Based on the understanding of the underlying drivers, predictive models can then provide forecasts of consumer propensity to lapse in response to changes in different variables (eg, price changes). This can be used to appropriately allocate resources to reduce lapses.

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