Author(s)

YunXiao Ma

Affiliation(s)

International Business Strategy Institute, University of International Business and Economics, Beijing 100105, China.

Corresponding Author

YunXiao Ma

ABSTRACT

The insurance industry is facing a crisis. Its revenue-generating talent resources are shrinking. As the industries aging population moves closer to retirement, the new young talent is not able to generate equivalent revenue. In this study, a data- mining-based model is proposed for dataset including 521,392 entries with information of insurance agents registered in LIMRA from 2010 to 2016. Bringing the principal component analysis (PCA) model to extract the low-dimensional and efficient feature information. After analyzing the dataset, decision tree model is employed, which proved to be robust to demonstrate the conclusion. It is determined that the industry would be obliged to make changes in distribution channels as well as how to reward employees. As a gesture to retain talents, a strategy to attract millennials is required, as well as some additional evaluations to provide better insights on recruiting future talents. Nothing indicates that the industry has made any significant changes in its business model to appeal to millennials. In addition, subsequent evaluations are recommended. “ New Agent Financing ” do not correspond to significant retention of agents. Licensing shows significant value in premium values depending on the company types, which indicates that it would be of a certain value to develop the education reimbursement programs for agent licensing. The whole industry ought to invest in technology to enable potential customers to do research and shopping. Geographic location makes a difference in premium totals, from which the strategies based on market penetration are recommended. Finally, moving to a consumer-centric culture is encouraged. The utilization of net promoter scores and a voice of the customer program is proposed to improve revenue with current resources.

KEYWORDS

LIMRA; PCA; Decision tree; Revenue generation; Retention model

CITE THIS PAPER

YunXiao Ma. Data mining for enhancing revenue generation capabilities in the insurance industry. Eurasia Journal of Science and Technology. 2024, 6(7): 27-38. DOI: https://doi.org/10.61784/ejst3053.

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