Caravan Insurance Customer Profile Modeling with R

The business objective addressed here is how an insurance company can use its current customers’ data for modeling target customer profiles aimed at cross-selling of Caravan (Motor Homes) policies as well as targeting new customers. Current customers’ data are reviewed and preprocessed, followed by preliminary analysis (such as linear regression analysis) to gain an understanding of the nature of data. Various modeling methods were considered before it was decided to develop classifier models of a target customer profile. Models derived with four different classifier methods are presented with comparative results of their explanatory and predictive power as well as computational efficiency. Although all four models of target customer profile share a number of similarities, they also differ in interesting ways. The data mining exercise and the resulting models as well as possible refinements in the model constructing process is critically evaluated in the final section. We conclude with how the results can provide pointers for target marketing strategy.