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Success Story

AXA Sigorta introduces price optimisation to improve customer renewal rates

Insurance Consulting and Technology
Insurer Solutions|

February 1, 2022

How AXA Sigorta, the Turkish operating company of multinational insurer AXA and market leader in the Turkish insurance market, has used Radar to improve retention rates for its Casco (vehicle damage) motor product.

The challenge


The Turkish motor market has been highly competitive in recent years, with the added ingredients of volatile economic inflation and regular changes in regulation. Increasing pricing sophistication and a spate of new market entrants intent on gaining market share have further ramped up the need for, and benefits of, strong technical and retail pricing - particularly in the Casco (vehicle damage) segment of the market.

Faced with this cocktail of competitive pressures, AXA Sigorta, one of the market leaders, determined a need to strengthen technical pricing in order to improve margins, volumes and the stability of its motor business.

Among the targets for the pricing transformation work that started in earnest in 2015 has been an improvement in Casco customer renewal/retention rates, a project for which the company decided to request competitive bids.


Our approach


WTW has supported AXA Sigorta throughout its pricing transformation journey, starting with the development of a technical pricing roadmap to put it in a market leading position based on its use of our Radar software suite, including Emblem, Classifier and Radar Base.

After progressing through projects on that roadmap, the company’s attention turned to improving Casco motor product retention rates without impacting its combined operating ratio (CoR) and accelerating its pricing sophistication using optimisation and machine learning in a dynamic pricing environment.

AXA Sigorta was looking for a solution that provided strong modelling capabilities to meet its current needs and also a platform to create and use machine learning and artificial intelligence, which are key parts of its pricing strategy.

Having been successful in winning the project in competition with other software/service providers, our team started by understanding AXA Sigorta’s existing retention processes in order to build retention and cancellation models following the customer journey. The addition of the Radar Optimiser module to AXA Sigorta’s Radar package enabled this to then be integrated into a price optimisation environment that makes use of customer demand models to indicate propensity to renew at different price points. A/B testing was used in the implementation phase, ahead of a full rollout of renewal price optimisation in 2021.

The introduction of Radar Optimiser and the work WTW has been doing with us on technical pricing over several years have been significant factors in improving retention, reducing margin volatility and improving profitability in our motor book.”

Sanem Çıngay Buçukoğlu | Chief Operating Officer, AXA Sigorta

The results


“The combination of WTW’s software and technical pricing expertise have helped us develop a customer retention optimisation model that we believe really strengthens our position in the highly competitive Turkish Casco market.”

Sanem Çıngay Buçukoğlu
Chief Operating Officer, AXA Sigorta

The project went through a monitoring phase comparing a 30% non-optimised portion of the portfolio with a 70% optimised portfolio, in which the margins for the different segments were kept consistent and a focus was on reducing lapses. The lapses in the optimised cohort were 5-10% lower than the lapses in the non-optimised cohort.

With these signs of success AXA Sigorta has been confident to continue with further phases of its pricing transformation roadmap, which includes embedding the use of the gradient boosting machine (GBM) machine learning techniques available in Radar in its pricing process.

AXA Sigorta is proud to be at the forefront of innovation in the Turkish insurance market, and our long-standing partnership with WTW for consulting and software has been an important part of that innovation for a number of years. We look forward to continuing this relationship and exploring the future of insurance together.”

Yavuz Olken | CEO, AXA Sigorta

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