Business Case & Project Goal

Policy lapse is one of the major issues faced by insurance companies. It affects
their reputation in the market and also hampers their financial growth as it results
in a decline in future profits
Policyholder behavior is a crucial and a major profit and risk driver for insurance
business, and accurate modeling of this assumption is therefore critical for risk
management. Hence our primary goal is to develop a model predict lapsed policy
correctly ahead of time and to figure out which factor are crucial for policy lapse
and surrenders
Since the effect of each factor on the lapsed policy may change in different years,
we would like to develop a survival model in each particular year to explore which
factor has the most impact on the lapsed policy in exactly one year and how does
this impact change cross seven years

SECTION B 13 TEAM 3 - LIMRA PREDICTIVE MODELING