Overview. Major insurance company acquiring new automobile policyholders through its direct mail program consisting of 40 million mail pieces per year. Response rates are good; however, the profitability of new customers is declining. The challenge is to increase the profitability of new customers.

Inventory. Company is currently utilizing response models to target prospects for mailings.

Best Practice. Use predictive models that optimize desired metrics.

Gaps. Company is not using models that optimize profitability and lifetime value, only response.

Options/Priorities. Develop a model that targets prospects based on lifetime value and not just response.

–Tim Berry


Reproduced from National Underwriter Edition, March 3, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.