Example 1.1
Insurance companies can create special catalogs targeted to various demographic groups based on
attributes such as income, occupation and age as physical characteristic of potential customers.
The company then can perform a clustering of potential customers based on determined attribute
values to create new catalogs. The results of the clustering exercise can be then used by
management to create special catalogs for different policies and distribute them to the correct
target population based on the cluster for that policy.
An insurance company can group its customers based on common features. Company
management does not have any predefined for this label. Based on the outcome of the grouping
they will target marketing and advertising campaigns to the different groups for a particular type
of policy.