Predicting Customer Churn Using CLV in Insurance Industry

Abstract

Today, increased level of customer awareness caused them<br />to access to the other suppliers easily and they can get their services<br />from the competitors with similar or even better quality and same price.<br />Therefore, focusing on customers and preventing them to leave, has been<br />the most important strategy for any company. Researches have shown<br />that retaining former customers is cheaper than attracting new ones. In<br />the proposed model in this article we first identified important factors<br />causing customers in insurance industry, to have a specific behavior by<br />using a k-means clustering algorithm, and then we tried to predict the<br />future behavior of them by a logistic regression. Our model accuracy is<br />98%.