Application of ANN in non-life insurance industry Online publication date: Tue, 30-Sep-2014
by A. Ramakrishnan; S. Sudalaimuthu
International Journal of Advanced Operations Management (IJAOM), Vol. 3, No. 3/4, 2011
Abstract: The demand for accountability of marketing expenditures and allocation of marketing resources are a high priority for the industries at this hour. The industries either allocate their marketing budget based on traditional practices or on historical allocation level or on product level priorities. In order to efficiently allocate and show return on their marketing spending predictionof CLV has become critical. In this paper, the successful application of artificial neural network (ANN) algorithm and its usefulness in prediction of CLV and further segmentation and profiling using clustering technique is done. The prediction of CLV and resource allocation for a non-life insurance industry's business to business customers are carried out. The paper also compares the ANN with other data mining algorithms for its prediction accuracy and the managerial implications of ANN to identify the drivers of CLV are demonstrated. We have implemented the solution using WEKA, open source data mining software.
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