Cancellation rate

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In general, the cancellation rate in the economy is the volume-weighted proportion of the canceled contracts in the newly concluded contracts or contracts in the portfolio. The cancellation rate is particularly important in the insurance industry .


The cancellation rate is particularly important in sectors of the economy where orders or orders do not go into production immediately , but are first registered as incoming orders and then become the order backlog . The period between the order / order and delivery is therefore particularly long. The longer this period, the greater the risk of cancellation, i.e. the risk that orders / orders will be canceled by the client . This is particularly the case in the construction industry , in some areas of the manufacturing industry and in package tours . The cancellation rates also play a major role in insurance and building society savings .


The cancellation rate is determined in industry by comparing the canceled orders / orders with the total order value :


The more cancellations there are, the higher the cancellation rate and vice versa. Cancellations lead to a decrease in capacity utilization and ultimately the profit margins attributable to the cancellations no longer apply.

Life insurance

Cancellation is the termination or termination of an insurance contract before the end of the contractual term . The strength of new business or the insurance portfolio is measured using the cancellation rate. It is the ratio of the premature termination of the contract (premature termination due to termination , exemption from premiums or buyback ) as a percentage of the new business redeemed in the financial year or the average insurance portfolio. There are often higher cancellation rates with insurance companies with structured sales .


The General Association of German Insurers (GDV) is the premature departure of contributions and the average current in its calculation of the cancellation rate annual fee in proportion.

year Cancellation rate of the life insurance industry
2002 4.9%
2003 5.5%
2004 5.6%
2008 4.0%
2009 3.9%
2010 3.6%
2011 3.5%
2014 3.1%
2017 3.7%

The cancellation rate is not the same for all insurers . On the contrary, it fluctuates strongly between the individual companies (2004 between 2.3% and 24.5%). Among other things, this depends on the type of new business, the ratio of new business in recent years to the portfolio (younger business has a higher tendency to cancel) and the quality of sales.

Cancellation provisions

To protect against early termination for contracts with negative actuarial reserves in health insurance , which are netted with positive, a cancellation reserve is set up in the amount of the expected cancellation reserves. Insofar as premium claims are created in property and casualty insurance that can still be omitted due to the discontinuation or reduction of the insurance risk, a cancellation provision is also created for this case. In life insurance , no provision is made for cancellation, since the correction of claims for due or not yet due premiums, insofar as the latter may be recognized at all on the basis of the contracts, is made directly by means of a general valuation adjustment of the relevant asset item.

The cancellation rate is an important indicator for the economic situation of an insurer in the annual financial statements . The cancellation risk consists of the risk that the policyholder cancels an insurance contract before the insurance period expires. This risk can be countered by cancellation provisions. Pursuant to Section 31 Paragraph 1 No. 1 RechVersV, they are other technical provisions in the balance sheet and cover the risk of cancellation or a buyback by the policyholder.

The expected cancellation rate is determined with various evaluation methods for insurance contracts, e.g. B. the cancellation provision , the fair value and the embedded value , are taken into account in order to map the development of the portfolio as a result of cancellation.

Building society savings

In the home loan and savings business, the cancellation rate is the ratio of the home loan and savings sum of the home loan and savings contracts that were terminated in the financial year before the purchase fee was paid in full to the new business concluded in the financial year.

Package tours

In German travel law , the cancellation is called "withdrawal before the start of the journey" and is regulated in § 651h BGB . Thereafter, the traveler can withdraw from the travel contract at any time , whereby the tour operator loses its entitlement to the agreed travel price, but can instead demand appropriate compensation. This provision allows the establishment of reasonable compensation flat rates in pre-formulated general travel conditions, for example with regard to the period between the declaration of withdrawal and the start of the journey. This compensation compensates for costs incurred, but not for lost profits. The risk of cancellation consists in the fact that the tour operator can no longer sell the trips that become free due to cancellation.


Possible causes for cancellations are in particular:

These causes can occur in combination or in isolation.

Reducing the risk of cancellation

All companies affected by cancellations must be a cancellation Management ( English churn management ) install to reduce the cancellation rate, which aims at the sustainable reduction of the lapse risk. It has the task of uncovering the weaknesses that are responsible for a high cancellation rate on the basis of an error-cause analysis . For this purpose in which production a quality management required in the sales and customer service , a complaint management and the improvement of marketing strategy .


Individual evidence

  1. Jörg Wöltje, Betriebswirtschaftliche Formuleln , 2010, p. 27
  2. Fred Wagner (ed.), Gabler Versicherungslexikon , 2017, p. 877
  3. Annette L. Dernick / Uwe Gail / Dieter Hesberg / Christian-Horst Musiol / Wolfgang Schwarzer / Eva-Bettina Ullrich, Control and Management in the Company , 2016, p. 312
  4. Maximilian Koch / Stephan Umann / Martin Weigert (eds.), Lexikon der Lebensversicherung , 2002, p. 115
  5. ^ General Association of the German Insurance Industry (GDV), cancellation rates 2010-2017
  6. Fred Wagner (ed.), Gabler Versicherungslexikon , 2017, p. 878
  7. Claudia Ossola-Haring, Handbook Key Figures on Corporate Management , 2006, p. 308