Indian insurance provider ICICI Prudential Life Insurance is using machine learning (ML) models to predict the future persistency behaviour of customers who are likely to pay their renewal premium on time. The insurance firm claims that the ML model has led to higher premium collection and profitability.
Since the deployment last year, the firm has seen persistency ratio in the 61st month improve from 50.2% in December 2021 to 64.8% in December 2022.
Persistency ratio is an important indicator of the quality of the sale and future growth of the insurer. It measures the proportion of customers paying premiums.
Using the model, the firm claims it has a better understanding of the future persistency behaviour of new customers and assists sales managers in responding to their queries more effectively. It has also allowed them to identify distinct customer segments and offer a more personalised experience to existing customers by factoring in their preferences, profiles, and expectations.
“We have been leveraging data science and technology to ensure our customers are on course to achieve their long-term financial goals. This is in line with our vision of building an enduring institution that serves the protection and long-term saving needs of customers with sensitivity,” Dhiren Salian, Deputy Chief Financial Officer, ICICI Prudential Life Insurance, said in a statement.
