Churning
Financial Dictionary — Business & Management
Definition
Churning occurs when sales agents urge a client to cash in an existing insurance policy after a short time and replace it with another. It is a lucrative practice because agents earn commission on each new policy they sell. It is also illegal.
Use cases, Example & Why it matters
Use cases
- Used in planning, organizing, and controlling business operations.
- Used when setting KPIs, policies, procedures, and improving processes.
- Used when setting KPIs, policies, procedures, and improving processes.
Example
- Example: Management applies **Churning** when designing policies and monitoring performance against targets.
Why it matters
- Why it matters: Improves execution, accountability, and decision speed while reducing operational waste.