THE TEMBERTON APPROACH

Insurance Solutions

Insurance executives face numerous external challenges over which they have little control: increasing regulatory pressure, growing costs, and rising claim expenses – to name a few. Now more than ever, insurers need to focus on the business and marketing fundamentals that are within their control.

Customer relationship management is one area where companies can maintain a competitive edge; business analytics and customer intelligence solutions offer valuable help by providing actionable insights into customer behaviors and preferences when it comes to:

ACQUISITION AND RETENTION  It is essential for insurance companies to continually attract new business while focusing efforts on maintaining existing customers. Sophisticated, analytics-driven retention programs are especially critical given the current high cost of acquiring new customers.
PROFITABILITY 
Not all customers are profitable ones. Acquisition and retention programs are most effective when companies consider customer lifetime value (CLV) in targeting the right individuals for sales and marketing efforts.
CROSS SELLING  Selling to existing customers is a smart and reliable source of revenue for insurers. Using analytics to identify the customers most likely to buy specific products – based on key demographics, customer behavior patterns, and lifestyle event triggers – can significantly reduce costs while maximizing profits.
CUSTOMER SERVICE MANAGEMENT  In an era of cost-cutting, insurers are challenged to reduce operational overhead while still providing effective service to policyholders – especially those high-value individuals the company wishes to retain as customers.

What we offer

Temberton has been providing insurance companies with sophisticated data management and predictive analytics support for over twenty years. Our experience affords us insight into the challenges insurance executives face and the complex variables that impact profitability in this industry. We know how business intelligence tools can best be put to work in insurance companies to dramatically improve business outcomes. Our services include:

• Skillful data management that guarantees clean, consistent, accurate, and timely data
• Powerful data mining and analytics that predict customer behavior, such as likelihood to attrite or likelihood to buy
• Customer segmentation based on demographic, geographic, and behavioral data
• Easy-to-use reporting tools that keep decision makers apprised of the latest information

x Insurance Case Study 1

Increasing Retention, Stemming Attrition

Challenge

When a policyholder starts making late payments against their life insurance policies, it often indicates that they are considering switching carriers. For insurers, the cost of acquiring new customers can be up to 10 times the cost of retaining existing ones; thus preventing policies from lapsing can translate into millions of premium dollars. Our client, a household name in the life insurance industry, was looking for a way to stem attrition; Temberton was tasked with finding an effective solution.

Solution

Our goal was to discover behavior patterns that indicate customers who are likely to lapse or attrite. Based on these findings, we would identify the most vulnerable individuals. Our client would then determine which operational strategies to implement to address those likely-to-attrite policyholders. To this end, Temberton designed and deployed a Late Payer/Lapse study of life insurance policies. To implement our study, we had to overcome numerous technical and operational challenges, amongst them: acquisition and consolidation of data across numerous siloed systems within the company; identifying multiple predictors of lapse policies; segmentation of populations; and servicing options to address late payment behaviors.

Outcomes

The results of our study translated into increased premium revenue through the design of marketing programs that reduced outstanding premiums and increased retention of vulnerable late payers.

x Insurance Case Study 2

Optimizing Call Center Resources

Challenge

Customer Relationship Management is a costly endeavor for insurance companies. Call centers respond to thousands of customer service inquiries daily, covering multiple products and handling diverse levels of customers. Our client, a major insurance company, wanted to cut operational costs while still providing an appropriate level of customer service. Temberton was asked to help with the development of a call center optimization strategy.

Solution

Temberton’s approach was based on implementing a Customer Profitability model combined with a Propensity to Purchase model. By analyzing and determining the most profitable customers and those most likely to purchase additional products, Temberton devised an actionable solution that could be implemented on the client’s CRM systems.

Outcomes

Using our study combining these two models, our client optimized their Call Center resources by offering stratified service levels to customers based on their aggregate model scores. Customers who fell into the highest quadrant - based on their high profitability and Lifetime Value scores - were routed quickly to 24/7 CSRs; those in the lowest quadrant were initially routed to IVR systems; and those in the middle were offered an intermediate service level. This translated to significantly lower operational costs for the client.