Auto-Owners Insurance Company
Proposed Project for the
MSU Industrial Math Students
Determining the leading factors of long-term customer retention in the insurance industry.
Project Overview
Insurance companies monitor the length of time their policyholder insurance policies
are in force or retained. Insurance customers non-renew their policies for various
reasons such as competitors offering a better price, policyholders moving to another
state, or poor agency service. One of Auto-Owners goals is to develop a long-term
relationship, by providing outstanding service, with the hope that the policyholder
will become a lifetime customer. Auto-Owners is interested in learning what current
policyholder characteristics are indicative of longer retention rates. By using
existing data files, Auto-Owners wants to build a predictive model which projects
expected longevity at policy inception.
Project Description
Data files containing insured characteristics such as agency, age, numbers of cars,
family structure, etc., will be provided to do initial data mining for relationships
and create an expected longevity model. Modeling work will entail determination
of significant prediction variables, evaluation of interactions between those variables,
and utilization of numerous statistical modeling techniques. Auto-Owners plans to
receive regular updates on the project's progress.
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