Digit Insurance's private car renewal rate fell from 52% to 45% in a quarter. How would you find the cause?

Introduction

Digit Insurance's private car renewal rate fell from 52% to 45% over one quarter. New policy sales held steady, and the overall motor market did not shrink. Renewals are critical for Digit because acquiring motor customers through partners is expensive, and retained customers usually have more predictable claims. I'll diagnose the drop with a structured root cause framework: clarify, rule out external factors, map the journey, decompose the metric, prioritise data, form and test hypotheses, then decide on a fix.

Step 1

Clarifying Questions (3 minutes)

• Definition: Renewal rate = policies renewed with Digit within the grace period / policies due for renewal. Correct?
• Scope: Private cars only, or two-wheelers too? Assume cars only; two-wheelers are stable.
• Timing: Sudden or gradual? Assume a sharp fall starting in the second month of the quarter.
• Channel mix: Is the drop across all channels (dealers, aggregators, POSPs, direct)? Unknown.
• Recent changes: Any pricing, product, partner or system changes? Assume underwriting revised motor pricing at the start of the quarter as part of a profitability push, and partner commission structures were updated.
• Competitor moves: Any aggressive pricing from rivals? Unknown.

Problem statement: Private car renewal rate dropped 7 points in a quarter, after pricing and commission changes, while new business held steady.