Customer retention in the insurance industry: Using survival analysis to predict cross-selling opportunities

In saturated markets customer retention offers a number of benefits to companies. While these benefits are recognised by financial institutions, many have not fully embraced the concept in practice. This paper focuses on the prediction of crossselling opportunities and attempts to answer the questions of who is likely to buy additional products from the same company, what the next product is likely to be and when the purchase is likely to be made. The analysis is based on a sample of 9,000 customers selected at random from the data warehouse of a large international financial institution. The paper discusses and illustrates the application of survival analysis techniques in this context and makes suggestions for further research in this area.