A logistic regression approach to estimating customer profit loss due to lapses in insurance

This article focuses on business risk management in the insurance industry. A methodology for estimating the profit loss caused by each customer in the portfolio due to policy cancellation is proposed. Using data from a European insurance company, customer behaviour over time is analyzed in order to estimate the probability of policy cancelation and the resulting potential profit loss due to cancellation. Customers may have up to two different lines of business contracts: motor insurance and other diverse insurance (such as, home contents, life or accident insurance). Implications for understanding customer cancellation behaviour as the core of business risk management are outlined.Policy cancellation, customer loyalty, profit loss, customer behavior.

Big data en seguros

El seguro es una disciplina basada en los métodos estadísticos que siempre ha empleado las fuentes de datos disponibles para pronosticar los resultados de pérdidas y su probabilidad de ocurrencia. Por este motivo, la estadística no solo ha tenido una posición prominente en la ciencia actuarial sino que forma parte de la esencia de la gestión de riesgo

Editor's Report 2014

Peer Reviewe