Renewal policy transaction

Insurers typically begin the process of renewing a policy for another period of time before its expiration. The most efficient way is to have PolicyCenter process these renewals automatically. However, sometimes an underwriter or producer must review or make adjustments to the policy before deciding whether it can be renewed. PolicyCenter is flexible in handling both automatic and manual renewals.

Note: In PolicyCenter, the user interface uses the term policy transaction to refer to submissions, policy changes, and other policy transactions. Policy transactions are implemented as jobs in the data model, and referred to as jobs in PCF files, Gosu classes, and other configuration files. Therefore, the configuration documentation refers to policy transactions as jobs.

A renewal policy transaction extends a policy for another period of time.

The goals of renewal processing are to:

Maximize retention of the best customers of an insurer.
Reduce expenses associated with the renewal process.

For both the producer and the insurer, renewing an existing customer is more profitable than acquiring a new customer with a similar profile because of acquisition and processing costs. An insurer’s retention ratio (the percentage of insurance policies that renew) is a closely watched metric. Too low a retention rate might indicate poor customer service to producers, noncompetitive pricing, or unfavorable claim service. Because the bulk of business is from existing customers, having an efficient renewal process has a great impact to minimizing overhead and optimizing revenue.

By design, PolicyCenter handles renewals efficiently. In the default configuration, policies nearing the end of their term are examined. If a policy can be renewed without requiring an underwriting decision, the renewal progresses automatically. However, if manual intervention (review of the policy) is necessary, then PolicyCenter guides you through this process.

An underwriter may need to review a policy for a variety of reasons, including:

Manual rating required
Insurer practices for that class of customer
Unfavorable claims or payment history
Significant changes in risks or exposures

PolicyCenter can track these variables through business rules evaluation, referral reasons, or pre-renewal directions which stop a policy from automatically renewing. This tracking allows an underwriter to review and make a decision on whether to renew, modify, or decline the policy.