Why has there been a 20% decrease in policy renewals for Naked Insurance's home insurance customers aged 30-40 in the last quarter?

Introduction

A 20% decrease in policy renewals for Naked Insurance's home insurance customers aged 30-40 in the last quarter is a significant issue that requires immediate attention. This analysis will systematically identify, validate, and address the root cause while considering both immediate and long-term implications for the business.

I'll approach this problem by first clarifying key details, ruling out external factors, understanding the product and user journey, breaking down the metric, gathering relevant data, forming hypotheses, conducting root cause analysis, and finally proposing validation methods and next steps.

Step 1

Clarifying Questions (3 minutes)

• Looking at the specific age group affected, I'm wondering if there's been a change in life circumstances for this demographic. Has there been any significant shift in homeownership rates or financial stability for the 30-40 age group in our target market?

Why it matters: This could indicate whether the issue is specific to our product or a broader market trend. Expected answer: No significant changes noted in homeownership or financial stability. Impact on approach: If true, we'd focus more on internal factors rather than market conditions.

• Considering the timing, I'm curious about any recent changes to our renewal process or pricing strategy. Have we implemented any updates to our policy terms, pricing models, or renewal communication methods in the past 3-6 months?

Why it matters: Recent changes could directly impact renewal rates. Expected answer: A new automated renewal reminder system was implemented 4 months ago. Impact on approach: This would shift our focus to examining the effectiveness of the new system and its impact on customer behavior.

• Thinking about customer satisfaction, I'm interested in our Net Promoter Score (NPS) trends. Has there been any notable change in our NPS or other customer satisfaction metrics for this age group over the past year?

Why it matters: A decline in satisfaction could explain lower renewal rates. Expected answer: NPS has remained stable overall, but there's been a slight decrease for the 30-40 age group. Impact on approach: We'd need to dig deeper into specific pain points for this demographic.

• Considering competitive pressures, I'm wondering about our market position. Have any of our major competitors launched new products or aggressive marketing campaigns targeting this age group recently?

Why it matters: External competitive factors could be drawing customers away. Expected answer: One competitor introduced a bundled home and auto insurance package with attractive rates. Impact on approach: We'd need to assess our product offering and pricing strategy in comparison to competitors.