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Analysis Of Internet Auto Insurance Purchasing Behavior

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					   Analysis of Internet Auto
Insurance Purchasing Behavior
         January 27,2011




                            1
Presenters

     Roosevelt Mosley, Principal
     Pinnacle Actuarial Resources, Inc.



     Susan Kleinman, Director
     comScore, Inc.




     Nick Kucera, Statistical Data Analyst
     Pinnacle Actuarial Resources, Inc.




                                             2
Discussion Topics
   Customer response models
   comScore background and data
   Description of research
   Characteristics of shoppers
   Model development
   Examples of factors that drive conversion
   Impact of prices on conversion
   Analysis of unstructured data
   Additional research

                                                3
Customer Response Analyses

      Marketing Effort
                          Quoting
                          Analysis
           Quote
                         Conversion

           Sale
                          Analysis

                           Lapse /
                         Cancelation

      Renewal Quote
                          Analysis

                         Retention

        Renewal
                          Analysis



                                       4
Customer Response Analyses

 Quoting analysis: analysis of the likelihood of a
  prospective insured obtaining an insurance quote from
  you
 Conversion analysis: analysis of the likelihood of a
  prospective insured that has received a quote purchasing
  insurance from you
 Lapse/Cancelation analysis: likelihood of an insured not
  lapsing or canceling the policy mid-term
 Retention analysis: analysis of the likelihood of a current
  insured renewing with you



                                                            5
Customer Response Modeling -
Challenges

   Model structure and parameterization
   New territory – learning curve
   Priority
   Internal data availability
   Internal data applicability
   Availability of price change data
   Measuring market competitiveness
   Applications
                                           6
comScore Background & Data




                             7
 comScore is a Global Leader in Measuring
 the Digital World
NASDAQ            SCOR
Clients           1600+ worldwide
Employees         900+
Headquarters      Reston, VA
                  170+ countries under measurement;
Global Coverage
                  43 markets reported
Local Presence    30+ locations in 21 countries




                                                              8
                                            

                                                      V0910
  What We Do….
 We provide digital marketing intelligence that helps
  our customers make better-informed business decisions
  and implement more effective digital business strategies
 We measure the continuous online activity of 1 million
  people
  in the U.S. who have granted us explicit permission to
  confidentially measure their Internet usage patterns.
 Our consumer panel is a representative cross-section of the
  U.S. population, worldwide regions and individual countries
 We also have permission to:
      Survey panelists
      Match to third-party databases
      Append offline data


                                                                9
The Trusted Source for Digital Intelligence
Across Vertical Markets
    9 out of the top 10     9 out of the top 10
    INVESTMENT BANKS        AUTO INSURERS


    4 out of the top 4      9 out of the top 10
    WIRELESS CARRIERS       INTERNET SERVICE
                            PROVIDERS

    47 out of the top 50    9 out of the top 10
    ONLINE PROPERTIES       PHARMACEUTICAL
                            COMPANIES

    45 out of the top 50    9 out of the top 10
    ADVERTISING AGENCIES    CONSUMER FINANCE
                            COMPANIES

    9 out of the top 10     9 out of the top 10
    MAJOR MEDIA COMPANIES   CPG COMPANIES
                                                  V0910




                                                  10
Auto Insurance Quote Detail

 Data is captured from what panelists see using
  scraping technology




                                                   11
 Auto Insurance Quote Detail
 Data for 5 Top Auto Insurance Company Sites
                                                – Drivers
                                                   • Age
    – Quote


                                                   • Gender
       • ZIP code


                                                   • Marital Status
       • Bodily injury liability limits


                                                   • Industry/Occupation
       • Coverage package


                                                – Vehicles
       • Premium quoted


                                                   • Vehicle year/make/model/type
       • Final Purchased Premium


                                                   • Vehicle use
       • Company name


                                                   • Annual mileage
       • Homeownership


                                                   • Comprehensive deductibles
       • Whether SSN entered


                                                   • Collision deductibles
       • Primary driver education


                                                – Incidents
       • Current Insurance Information


                                                   • Incident Type
              • Whether currently insured


                                                   • Incident Description
              • Length of gap in coverage
              • Length of current carrier
              • Length continuously insured
              • Prior BI Limit
                                                                                 12
Auto Insurance Quote Detail Data –
Source of Traffic Data

 Source of traffic is broken out into the following
  categories:
      Paid search
      Natural search
      Webmail sites
      Other referred
      Non-referred
 For search, we know the search engine, click type
  (paid/natural), and the search phrase
 For webmail sites and other referred, we know
  the referring site

                                                       13
  Pinnacle & comScore Research

Marketing Effort
                   Population   Target        Description

                   Auto         Quote         Of those that visit the website, people
                   Insurance    Initiated     with what characteristics are more likely
                   Website                    to start the quote process?
     Quote         Visitor

                   Quote        Quote         Of those that initiate the quote process,
                   Initiated    Submitted     what is the likelihood that they complete
                                              it?
                   Quote        Policy Bind   Of those that actually submit the quote,
      Sale         Submitted                  how many complete the purchase?




                                                                                 14
Characteristics of Shoppers




                              15
                                                          Data Summary – Driver1 Age

                                                                         Model: Purchase Made During Session


                                           18.0%                                                                                                                 100.00

                                           16.0%                                                                                                                 90.00
Exposure (Sessions with completed quote)




                                                                                                                                                                 80.00




                                                                                                                                                                          Purchase Frequency (per 1,000)
                                           14.0%
                                                                                                                                                                 70.00
                                           12.0%
                                                                                                                                                                 60.00
                                           10.0%
                                                                                                                                                                 50.00
                                           8.0%
                                                                                                                                                                 40.00
                                           6.0%
                                                                                                                                                                 30.00
                                           4.0%
                                                                                                                                                                 20.00

                                           2.0%                                                                                                                  10.00

                                           0.0%                                                                                                                  -
                                                          19


                                                               20


                                                                    21


                                                                         22


                                                                              23


                                                                                   24


                                                                                           25-29


                                                                                                   30-34


                                                                                                           35-39


                                                                                                                   40-44


                                                                                                                           45-49


                                                                                                                                   50-54


                                                                                                                                           55-59


                                                                                                                                                   60-64


                                                                                                                                                           65+
                                                   <=18




                                                                                        Age Driver 1



                                                                                                                                                                                                           16
                                                         Data Summary – Number
                                                             Vehicles/Drivers

                                                                  Model: Purchase Made During Session


                                           70.0%                                                                                    90.00
Exposure (Sessions with completed quote)




                                                                                                                                    80.00
                                           60.0%




                                                                                                                                            Purchase Frequency (per 1,000)
                                                                                                                                    70.00
                                           50.0%
                                                                                                                                    60.00

                                           40.0%                                                                                    50.00


                                           30.0%                                                                                    40.00

                                                                                                                                    30.00
                                           20.0%
                                                                                                                                    20.00
                                           10.0%
                                                                                                                                    10.00

                                           0.0%                                                                                     -
                                                   1/1




                                                                      2/1




                                                                                    2/2
                                                         1 / 2+




                                                                                                  2 / 3+




                                                                                                               3+ / < 3




                                                                                                                          3+ / 3+
                                                                            Policy Number Vehicles / Drivers




                                                                                                                                                                             17
Data Summary – Bodily Injury Limit




                                     18
Model Development




                    19
   Modeling Techniques

            Neural
           Network

Decision              Regression
 Tree                  Analysis


           Ensemble



                                   20
Examples of Characteristics That
      Drive Conversion




                                   21
                                                           Age of Driver
                                                     Model: Purchase made during session

             1.40                                                                                                              18%
                                                                                              131%
                                                                                                                               16%
             1.20                                                                                    118%
                                                                                117%
                                                                                       111%                                    14%
                                                                                                            104% 104% 103%
             1.00                                                        100%
                                                                                                                               12%




                                                                                                                                     Exposure Percentage
             0.80                                                                                                              10%
                                                           76%
                                                                 72%
Relativity




                                               67%   69%
             0.60                                                                                                            62%8%


                                         47%                                                                                   6%
             0.40              41%
                                                                                                                               4%

             0.20      20%
                                                                                                                               2%


             0.00                                                                                                              0%


                    Sessions with Completed Quote
                    Modeled Relativity                                 Age Driver 1
                    One Way Relativity

                                                                                                                                                           22
                                                     Education

                                              Model: Purchase made during session
             2.50                                                                                        50%

                                                                                                         45%

             2.00                                                                          196%          40%

                                                                                                         35%

                                                                                    155%




                                                                                                               Exposure Percentage
             1.50                                                       146%                      149%   30%

                                                             131%
Relativity




                                                      126%                                               25%

             1.00                             100%                                                       20%

                                                                                                         15%
                            70%

             0.50                                                                                        10%

                                                                                                         5%

             0.00                                                                                        0%


                    Sessions with Completed
                    Quote
                    Modeled Relativity                       Primary Driver Education


                                                                                                    23
                                          Price Sensitivity

                                  Model: Purchase made during session
             1.20                                                                                      60%


                                   106%
             1.00          100%                                                                        50%



             0.80                                           79%                                        40%
                                               76%                                               76%




                                                                                                             Exposure Percentage
                                                                        71%
Relativity




             0.60                                                                                      30%
                                                                                    52%

             0.40                                                                                      20%



             0.20                                                                                      10%



             0.00                                                                                      0%

              Sessions with
              Completed Quote
              Modeled
              Relativity
                                   Percent Final Quoted Premium greater than Minimum Quoted Premium



                                                                                                                                   24
Unstructured Data




                    25
             Search Phrase Analysis

 Categories                                                 Process
        Specific companies                                           Remove punctuation
        “Quotes” – auto,                                              and non-characters
         homeowners, life,                                             [|./!#?*$%()-@]
         insurance                                                    Parse phrase into words
        Value – cheap,                                               Summarize the
         affordable, etc.                                              frequency of each word
        Specific agents                                              Correct for misspellings
        Circumstance - teen                                          Build cluster analysis to
        Other – TurboTax,                                             determine key word
         hydrogen fuel cell                                            associations
Insuranced insurance: insurance0 insurance3 insurances insurancer insurancej insurancel insuranceg insurrance inssurance
           insurannce insurancce iinsurance innsurance insuraance isnurance insuarnce inusrance insuranceco
                                                                                                                   26
Cluster Text Analysis




                        27
Summary & Additional Research




                                28
Lift Chart




             29
  Additional Research

Marketing Effort
                   Population   Target        Description

                   Auto         Quote         Of those that visit the website, people
                   Insurance    Initiated     with what characteristics are more likely
                   Website                    to start the quote process?
     Quote         Visitor

                   Quote        Quote         Of those that initiate the quote process,
                   Initiated    Submitted     what is the likelihood that they complete
                                              it?
                   Quote        Policy Bind   Of those that actually submit the quote,
      Sale         Submitted                  how many complete the purchase?




                                                                                 30
                Questions?

            For further information, contact:

    Roosevelt Mosley                   Susan Kleinman
rmosley@pinnacleactuaries.com    skleinman@comscore.com

                      Nick Kucera
              nkucera@pinnacleactuaries.com




                                                          31
Parting Thoughts…

 Please fill out the survey
 Thank you to our panelists
 Join us next month


            Kevin Madigan, ACAS, MAAA
   ERM: Fundamentals and Implementation

                     Consultant
          Pinnacle Actuarial Resources, Inc.



                                               32

				
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