Selecting prospects for cross-selling financial products using multivariate credibility

A survey of personalized treatment models for pricing strategies in insurance

“…Recent contributions (see, Thuring et al (2012) and Kaishev et al (2013)) consider the potential heterogeneity in the profitability of the cross-sell effort, i.e., an action designed to sell additional products to existing customers. Thuring et al (2012) implement a method for selecting policy holders to whom a company should seek to cross-sell additional insurance contracts using multivariate credibility.…”

“…Thuring et al (2012) implement a method for selecting policy holders to whom a company should seek to cross-sell additional insurance contracts using multivariate credibility. The method is based on the idea that the claims behavior of an individual customer in relation to a policy not yet owned by that customer should be similar to their claims behavior in relation to their existing policies.…”

“…Thuring et al (2012) are able to identify policy holders who have up to 64% more claims than a priori expected in a new insurance policy which might have been wrongly offered to them by the insurer. In a similar context, Kaishev et al (2013) analyze the magnitude of that loss and report that it might be attributable to just a few policy holders in the portfolio.…”

“…In this context, predictive purchasing models can provide some orientation to the company as to which action should be adopted in each situation, but the particular nature of the insurance business has yet to be properly examined and discussed in the marketing literature. A number of recent papers have focused primarily on the reactions of those holding insurance to price changes, but none of them presents a comprehensive framework for addressing the problem of pricing, renewal and cross-selling (Donnelly et al, 2013;Kaishev et al, 2013;Guillén et al, 2011Guillén et al, , 2012Thuring et al, 2012).…”

Predicting Probability of Customer Churn in Insurance

“…Different researchers argue that retaining a customer instead of getting a new one is a profitable strategy for the company, because the cost of finding a new customer is larger than the cost of keeping an existing one [1][2][3]. In fact, long-term customers tend to be more engaged with the company [4] and take less of the company's time than attracting new customers [5,6].…”