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8/14/2019 WHEN THE CUSTOMER WRITES HIS OWN STORY: A SEGMENTATION SCHEME FOR THE LIFE INSURANCE MARKET
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Jomar F. Rabajante and Allen L.Nazareno
University of the Philippines LosBaos
WHEN THE CUSTOMER WRITES HISOWN STORY
A SEGMENTATION SCHEME FOR THEA SEGMENTATION SCHEME FOR THE
LIFE INSURANCE MARKETLIFE INSURANCE MARKET
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Life insurance is not just aboutbusiness, it is also personal.
Life insurance products are notbought but are sold.
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The Segmentation Scheme
Agent
MarketingDepartmen
t
8/14/2019 WHEN THE CUSTOMER WRITES HIS OWN STORY: A SEGMENTATION SCHEME FOR THE LIFE INSURANCE MARKET
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helpful in customer profiling in two ways:Product Matching and Semi-PersonalizedCustomer Care.
useful in enhancing renewal payments (lifeinsurance does not lie on the 1st -year premiumpayments alone)
useful in the follow-up marketing activities suchas up-selling and cross-selling of otherinsurance products
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let the clients write their own story withagents guidance
make a concept map by starting with acentral concept and then branching out
to more, related concepts
8/14/2019 WHEN THE CUSTOMER WRITES HIS OWN STORY: A SEGMENTATION SCHEME FOR THE LIFE INSURANCE MARKET
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quantify qualitative decision making
capture the uncertainty in humanjudgment
used to decide which priorities (calledas criteria) should be ranked first,second, third, and so on
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TABLE 1. Saatys Scale for PairwiseComparison
8/14/2019 WHEN THE CUSTOMER WRITES HIS OWN STORY: A SEGMENTATION SCHEME FOR THE LIFE INSURANCE MARKET
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The comparison matrixA, which followson the clients judgment between therelative importance between two
factors, is constructed.
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The matrix above is transformed into afuzzy comparison matrix with adifferent membership scales
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TABLE 2. Scale for Fuzzy PairwiseComparison
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The scales used in the table follow therelationship:
1
ijij
ij
ara
= +
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The priority weights are determinedusing the following formulas:
1
ii n
i
j
bw
b=
=
1
1
1i
n
j ij
b
n
r=
=
where,
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The consistency of the generatedcomparison matrix is determined using
the consistency ratio:CR =(Consistency Index of matrix A)
(Random Consistency of matrix A).
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0.283905
0.336879
0.379216
W =
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new technique in grouping the customers
demographic and psychographic profiles are tobe considered, as well as the relatedness of thestories of the customers
integration of all the outputs from the mind
map and Fuzzy AHP
other than customer profiling, the insurancecompany can also determine what kind ofcustomers the agents tap
8/14/2019 WHEN THE CUSTOMER WRITES HIS OWN STORY: A SEGMENTATION SCHEME FOR THE LIFE INSURANCE MARKET
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Robust Product Matching
Prod
uct D
Prod
uct B
Product C
Product A
Characteristic U(Unique
forProductD)
Characteristic V
CharacteristicW
CharacteristicX
Characteristic Y
Characteristic Z
8/14/2019 WHEN THE CUSTOMER WRITES HIS OWN STORY: A SEGMENTATION SCHEME FOR THE LIFE INSURANCE MARKET
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Customer
1
Customer
4
Customer
3
Customer
6
Customer
7
Customer
5
Customer
2
OFFER
MARKETING
ACTIVITY I
OFFER MARKETING
ACTIVITY I, II or III or
none
A connection
means that the
two customers
have the same,
let say, priority
J.
1/Rank of Char J = 1/2
(1/Rank of Char K = 1/ 4) + (1/Rank of Char L = 1/3)
OFFERMARKETING
ACTIVITY II
Semi-Personalized Customer Care
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Artificial Neural Networks, Cluster Analysis andother multivariate statistical analysis areused for grouping customers. However,Network Analysis is a new data miningtechnique, which does not only give list ofgroups but can also give visualization of andflexibility in the grouping.
Customer profiles need to be updatedfrequently, e.g. 2 to 3 years. Softwaresshould be used for a large database.
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The customer stories must beheard, and this will help the
insurance industry spread thebenefits of having financial
protection.
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THANK
YOU.