Persistency strategy; Birla Sunlife Insurance Limited

Abstract

Insurance as we are aware has a J shaped profitability curve. The cost of acquiring new business is very high and companies have to bear these costs during the initial years. Retaining business over the life time of a policy is critical to tum profitable. Sourcing of quality business is thus very important for efficient use of the company resources. In the context of Insurance Persistency would mean the ability to retain business over the stipulated life of the contract. The focus of the project was to analyze inforce customer demographic data and to identify trends. A predictive model based on both logistic regression -aRc} CHA!D.was constructed to identify significant variables. The data was also separated and analyzed individually. The various payment modes were benchmarked to identify potential drivers of persistency. The final recommendations made were based on both qualitative observations and the quantitative analysis of the data.