Acceptable cancellation rate

[hardworker]

What is considered an acceptable cacellation rate and what are the best ways to guard against cancellations

 

[jdeasy]

I’m not sure what a cancellation rate is but no cancellation is acceptable.

 

[Tampa Bay Rep]

In the insurance industry, an acceptable cancellation rate typically hovers around 5% or lower. While this can vary based on the specific type of insurance and the company’s policies, keeping the rate low is crucial to maintaining a stable portfolio.

To minimize cancellations, consider the following strategies:

1. Proactive Communication: Regularly check in with clients to address any concerns and update them on policy benefits.
2. Client Education: Educate clients on the importance of maintaining their policies and the consequences of cancellations.
3. Flexible Payment Options: Offer various payment plans to accommodate different financial situations.
4. Policy Reviews: Conduct annual policy reviews to ensure that coverage still meets the client’s needs and make necessary adjustments.
5. Risk Management Advice: Provide clients with advice on how to mitigate risks, which can also reduce claims and enhance policy value.

 

[jdeasy]

In the insurance industry, an acceptable cancellation rate typically hovers around 5% or lower. While this can vary based on the specific type of insurance and the company’s policies, keeping the rate low is crucial to maintaining a stable portfolio.

To minimize cancellations, consider the following strategies:

1. Proactive Communication: Regularly check in with clients to address any concerns and update them on policy benefits.
2. Client Education: Educate clients on the importance of maintaining their policies and the consequences of cancellations.
3. Flexible Payment Options: Offer various payment plans to accommodate different financial situations.
4. Policy Reviews: Conduct annual policy reviews to ensure that coverage still meets the client’s needs and make necessary adjustments.
5. Risk Management Advice: Provide clients with advice on how to mitigate risks, which can also reduce claims and enhance policy value.

He’s asking “acceptable”.

That’s up to each person.

But for FE it seems most IMO’s build in 20%

Seems terribly high to me.

 

[damadcrapper]

In the FE space most carriers are closely monitoring the following;
Not Taken
Early Lapse (withing the first 12 months)
Persistency (13th month and beyond)
Many carriers are not meeting the assumptions that were originally priced in to the products. I assume more price increases may be on their way, or agents who are not meeting the carriers quality of business metrics will be terminated.