Explore Policy Renewal and Cancellation
Learning Objectives
After completing this unit, you’ll be able to:
- Describe the basic steps for renewing and canceling a policy.
- Discuss how provided services and components support the policy renewal and cancellation processes.
Policy Renewal
As the policy term reaches its end, it’s time for all parties to think about renewals.
Carriers want nothing more than to retain their policyholders year after year. That makes it paramount that the renewal process is as frictionless and automated as possible. At the same time, carriers must be transparent about any pricing or coverage changes to a policy and allow the customer to review and modify their policy if desired. Otherwise, customers can lose trust.
Policy Administration for Insurance automates renewals and keeps the customer informed at each stage.
Observe the basic steps of the renewal process.
The key steps for renewing a policy include get policy data, set dates, price policy, create new policy, invoke rules, and display confirmation.
Here’s a summary of each stage.
Stage |
Summary |
---|---|
Get policy data |
A service retrieves information about the expiring policy. |
Set dates |
You specify the date you want the renewed policy to go into effect. Alternatively, an automated service can handle this step. |
Price policy |
A service calls a rating procedure that automatically reprices the policy based on changes to user characteristics or the procedure itself. |
Create new policy |
A service creates the new policy. Companion services generate a new policy transaction and revenue schedule. |
Invoke rules |
A service evaluates product eligibility and underwriting rules. |
Display confirmation |
You receive notification of the renewed policy with links to relevant records. |
Let’s take a closer look at the renewal process by returning to Anna Murphy and her auto policy with Cumulus Insurance, which is coming up for renewal in a couple of weeks.
A Satisfied Customer
Let’s flash forward 11 months. Anna is extremely satisfied with her experience using the Insurance Policy Administration system at Cumulus.
The quoting and policy issuance stages were a breeze, and she received terrific support from her broker and customer support reps throughout the process.
When it comes time to make in-term adjustments to her policy, she completes all desired tasks on her own in just a few minutes with just a few clicks. She’s the definition of a satisfied customer.
Anna Receives Notification of Renewal
One month before her policy is due to expire, Anna receives an email from Cumulus letting her know the original policy is up for renewal. The email provides the rate for her new coverage and informs her that the policy will renew unless she cancels.
Anna is extremely busy these days and pleased her policy will renew automatically. But she also appreciates the transparency and ease with which Cumulus updates her.
A Renewal Batch Process Does the Rest
Behind the scenes in the Cumulus policy-administration system, a renewal batch process runs and identifies all policies due to be renewed within 30 days. The renewal batch invokes the rating engine and receives updated information about Anna’s accident and claims history. It uses this information and the information already on her policy to reprice the policy and send her updated documentation.
If there’s any difference in the price, Anna can make a payment, and the policy administration system again integrates with the payment gateway. Once it receives authorization, it generates a new policy and creates a corresponding transaction to send to accounting’s general ledger system.
This example illustrates a special power of the Individual Insurance Policy Administration system, which is to automate multiple complex processes and reduce the burden on everyone.
Policy Cancellation
Sometimes, no matter how well-designed, efficient, and effective a policy-administration system is, customers may need to cancel a policy. Life changes, such as relocation or job loss sometimes make this a necessity.
So, a policy-administration system must provide a smooth process for cancellations. Otherwise, forget about bringing customers back into the fold when conditions change again, and they’re back in the market for a solution.
Policy Administration for Insurance makes it easy for customers to cancel a policy when necessary.
Observe the general process for policy cancellation.
The key steps for canceling a policy include get policy data, set cancellation date, price policy, confirm cancellation, cancel policy, and display confirmation.
This table summarizes each of these main steps.
Step |
Summary |
---|---|
Get policy data |
A service retrieves information about the original policy. |
Set cancellation date |
The user sets the cancellation date. |
Price policy |
A service calculates any refund amount available to the user based on the cancellation date. |
Confirm cancellation |
The user reviews the cancellation details and selects whether to proceed with the cancellation. |
Cancel policy |
A service cancels the policy, effective on the cancellation date. |
Display confirmation |
A Lightning web component displays confirmation of the cancellation. |
A Departing Customer
Flash forward 2 years. Anna is still overwhelmingly satisfied with the Cumulus policy-administration system.
However, she accepts a new job offer abroad and plans to leave the country and her two insured autos for at least a year. So, she needs to cancel her current policy and hopes it won’t be too much of a headache. If all goes well, she’ll happily return to Cumulus when she gets back.
Anna visits her now-familiar policyholder portal and initiates the Cancel Policy guided flow from her policy page. She sets the cancellation date to 2 months before the scheduled end date of the policy. Immediately, the guided flow returns with her calculated refund of $256.00 to be issued at the time of cancellation. Anna reviews the details and confirms the cancellation.
Having had such a smooth experience throughout the entire policy lifecycle, Anna knows that when she returns home after her stint abroad, she’ll come back to Cumulus for her insurance needs.
In the meantime, she checks the website to see what options they have for travelers insurance, since she’s now in the market for a good policy.