Grey clustering statistic, policyholder's risk attitude and purchase decision

Abstract

For life insurance companies, selecting the potential buyers of investment-linked insurance out of the existing policyholders is an effective and economic strategy. We try to use logistic regression model combined with grey clustering statistic to forecast the policyholder's purchase decision of investment-inked Insurance. Because policyholder of investment-linked insurance bears the investment risk, their risk attitude should have a great impact on their purchase decision of investment-linked insurance. We take general risk attitude and financial risk attitude into account at the same time. Grey clustering statistic offers an alternative to the traditional methods of classification for risk attitude. The accuracy ratio of our model is 79.11%. Finally, we find that financial risk attitude is more relevant for policyholders' purchase decision than general risk attitude.