Customer Lifetime Value Case Study
Taking sales, cross-sell, persistency, and claims into account, can we achieve our financial objectives through a loss leader strategy?
Our customer is a life and health insurer in a competitive and commoditized market. Our customer wanted to use its lower cost medical products as an acquisition instrument, with the intention of up-selling higher value life products to policyholders in the future. To validate this strategy our customer needed to understand the customer lifetime value and cross-sell propensity of its policyholders.
Montoux’s Decision Science Platform delivered the following outcomes:
• Analyzed over 60 million sales & price records
• Built price elasticity models (sales & lapse)
• Built price-to-claims propensity model
• Built cross-sell propensity model
• Integrated models into a holistic model for customer lifetime value
Identified opportunities to increase sales by 27% and improve customer lifetime value by $6m (5%)
Delivered deeper insights into the drivers of customer lifetime value
Proved the opportunity to extract value from the customer’s significant investment in data infrastructure
Reduce LTC claims costs and reserves by 5 percent, improve customer wellness outcomes.
Increase in-force protection product Embedded Value by 12 percent.
Identified a pathway to increase sales by over 30 percent.
Automating the experience study workflow; completed in near-real-time based on monthly data feeds.
Improve customer lifetime value by $6m per annum.