A renewal lapsed, and a code that says 'lapsed'
A client does not come back at renewal. The handler marks the policy as lapsed, perhaps with a note: 'client going elsewhere'. Where? Why? Price, service, a relative who became a broker, the business closed, the insurer declined? Nobody asks, or if they do, the answer lives in the handler's memory.
At the end of the year, the management accounts show retention down on a class of business. Nobody can say why, because the reasons were never captured in a way that can be counted.
Why the reason is never recorded
Losing a client is awkward, and handlers are busy with the renewals that did stay. Broking systems usually have a lapse reason field, but the options are broad and it is often left on a default. Following up with a client who has gone feels like a sales call nobody wants to make.
- Lapse reason codes are too broad to be useful.
- Handlers pick the first reason in the list.
- Clients are not asked why they left.
- Lapses caused by insurer declinatures are mixed in with client decisions.
- Nobody reviews lapses together, only the retention total.
Not knowing is the expensive part
If most losses on a class are to one online competitor on price, that points to one response. If they cluster around one handler, or one insurer's claims service, or one step in the renewal process, that points somewhere else entirely. Without reasons, the only lever is price, and management spend time guessing.
A lapse workflow with two sources of truth
- When a renewal is lost, either marked in your broking system or passing its date without being renewed, the handler is asked a short set of questions: who ended it, the main reason from a list you define, whether it went to a named competitor, and anything else they know.
- The client receives a short, polite exit question by email or text, with two or three clicks to answer and an optional comment, in your wording.
- Lapses flagged as service issues are passed to a manager, because they may need a conversation or, depending on what was said, handling under your complaints procedure.
- Reasons are reported by class, handler, insurer, source and client size, with the handler's and the client's view side by side.
- Clients who left on price can be diarised for contact before their next renewal, if your process and their consent allow.
What the report might show
| View | Question it answers |
|---|---|
| By class | Where is retention weakest? |
| By reason | Is it price, service, circumstance or insurer? |
| By handler | Is one team losing more for service reasons? |
| By insurer | Are declinatures or claims experience behind lapses? |
| Handler versus client view | Do we understand why people leave? |
Using the reasons
Retention stops being one number at year end. You see, month by month, why clients go, and you can do something about the causes you control, such as a stage of the renewal process that clients find slow, while accepting the ones you cannot, such as a business closing. The comparison between what the handler thought and what the client said is often the most useful part.
Is this your retention report?
- Lapsed policies carry a generic reason code.
- Clients who leave are never asked why.
- Retention is discussed as one total.
- You cannot tell insurer declinatures from client decisions.