Retention Analytics

Client Situation

The acquisition costs associated with acquiring a new customer in a life insurance business is significant as life insurance is sold rather than bought.

Challenge

A monthly client retention study was providing a useful indicator to management but there was a missing link to the financial impact of client retention performance.

Solution

A method was developed to estimate acquisition costs at the customer level. This allowed the financial impact of retention performance to be calculated. The financial impact of retention performance was then presented in monthly management reports.

Results

After implementing a customer retention financial KPI:

• The business improved profitability by improving the retention of more valuable clients.
• Emerging retention issues were quickly identified and managed.