Asia pacific journal of information systems

The Korea Society of Management Information Systems (한국경영정보학회)
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Application of AI-based Customer Segmentation in the Insurance Industry

  • Kyeongmin Yum (College of Business Administration, Seoul National University) ;
  • Byungjoon Yoo (College of Business Administration, Seoul National University) ;
  • Jaehwan Lee (Institute of Management Research, Seoul National University)
  • Received : 2022.03.30
  • Accepted : 2022.08.16
  • Published : 2022.09.30
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Abstract

Artificial intelligence or big data technologies can benefit finance companies such as those in the insurance sector. With artificial intelligence, companies can develop better customer segmentation methods and eventually improve the quality of customer relationship management. However, the application of AI-based customer segmentation in the insurance industry seems to have been unsuccessful. Findings from our interviews with sales agents and customer service managers indicate that current customer segmentation in the Korean insurance company relies upon individual agents' heuristic decisions rather than a generalizable data-based method. We propose guidelines for AI-based customer segmentation for the insurance industry, based on the CRISP-DM standard data mining project framework. Our proposed guideline provides new insights for studies on AI-based technology implementation and has practical implications for companies that deploy algorithm-based customer relationship management systems.

Keywords

Acknowledgement

This study was supported by the Institute of Management Research at Seoul National University.

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