Insurance companies are a business with a profit motive, they have two hurdles which they have to figure out to be successful:
1. Cost of acquiring a new customer
2. How to increase the profitability of classes of customers.
So, first cost is advertisement / sales offices, the second cost is selling a lower than competitors introductory first year cost.
How to increase profitability is the look as different classifications of customers and using stickiness calculations, increase prices where they calculate they will stick. The economics term is price sensitive or elasticity.
So based upon activities happening in your customer classification, which you will never find out as its a predicative analytics classification, prices are increased at different rates.
So, the best choice is to always compare pricing but the algorithms know that a two digit difference starts to cause customers to react. . . we have progressive (ASI) and have no idea if the cost is a good value or not, as the investment property has commercial insurance coverage.
marketing guy
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