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Where Is My Market? Mining Data to Find a Niche Commercial Lines Segmentation Workshop

Where Is My Market? Mining Data to Find a Niche Commercial Lines Segmentation Workshop Lisa Sayegh Presentation to the CAS March 2003. How?. Identify your strengths. Map to appropriate market segments. Identify high quality prospects. Company Strengths.

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Where Is My Market? Mining Data to Find a Niche Commercial Lines Segmentation Workshop

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  1. Where Is My Market? Mining Data to Find a Niche Commercial LinesSegmentation Workshop Lisa Sayegh Presentation to the CAS March 2003

  2. How? Identify your strengths Map to appropriate market segments Identify high quality prospects

  3. Company Strengths • Identify areas with performance success • Function within company • Industry-specific (or process-specific) knowledge • Recognition by industry segment • Sales distribution channel • Benchmark

  4. Identify Market SegmentsThat Utilize Your Strengths • Define and select market segment by: • Industry • Line of insurance • Demographics - geography, sales • Business parameters - size of risk

  5. Validate Segment Selections • Assess selected segments • Amount of total premiums • Profitability • Trends • Insurance Concentration

  6. Additional Considerations • Cost to sell to market segment • Cost to educate market • Different regulations • New trends to take into account • Cross selling

  7. Segment Successes • Linking selected segments to agent territories • Overlay agent territory to identified market segment • Identified suitable regions forexpansion of program

  8. What Data is Available? • Business information • Insurance Statistics • AM Best • Property & Casualty Stat Agents • State Insurance Departments • Other Insurance Information

  9. What Data is Available? Cont’d • Government information • Association information • Forecasting News • Your own data

  10. Using Multiple Data Sources • Are you comparing like for like? • Headquarter vs. location specific • Non-employers • Entire insurance market?

  11. Using Multiple Data Sources • How to integrate data across data sources? • Industry identification • Business size • Size of risk • Specific business

  12. Industry Classifications • Standard Industrial Classifications • Over 900 4 digit SICs or industry slices • Primary SIC • Replacement - North American Industrial Classification codes • Government information in NAICS only • Industry hasn’t responded yet • Advantage over SIC

  13. P&C Insurance Profitability Data • What’s available - • Aggregated actual performance data used as basis for pricing by insurers • ISO collects over 70% of commercial lines market w/o WC; have to be a participant to access • Data defined by classification code • Differs by line • Reflects risk

  14. Actual Insurance Information • Insurance performance • Law of large numbers • Actuarial Analysis e.g. development • May not reflect entire marketfor all lines • New lines with insufficient data • Business characteristics may not be available

  15. Industry Level Data Better SuitedFor Marketing • Data on common level; Compare across lines • Drill down capability to new markets • Can identify business trends Data by Industry needs to be developed; insurance information not available from stat agents.

  16. Analyzing With Your Own Company Data • Append SIC or NAICS • Develop a way to append additional business variables • Data that you may already be capturing

  17. Provide High Quality Prospects • Focus in on identified customer characteristics • Premium estimates • Geographic areas • Business size • Corporation Type • Additional data sources for specialty programs

  18. Where Is My Market? Mining Data to Find a Niche Commercial LinesSegmentation Workshop Lisa Sayegh Presentation to the CAS March 2003

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