1. CLUSTERING
Presented by : Ashish
Ranjan
Vaibhav Jain

2. Objective of the Study
O Maximize the company profits by
segmenting the business according to the
markets where the claim/coverage ratio is
least.
O To estimate the claim/coverage ratio for
each clusters & focus on the income
group having highest income with least
product penetration.

3. Data Variables Explained
O Claim Id
O Incident Date
O Claim Type : 1. Wind/Hail 2. Water Damage
3. Fire/Smoke 4.Contamination
5. Theft/Vandalism
O
O
O
O
O
Policy Id
Coverage
Income
Town size
Others Variables

4. Data Snapshot

5. Data Snapshot

6. Rapid Miner

7. K-Means Clustering

8. Clustering Analysis
Attributes
cluster_0
cluster_1
cluster_2
cluster_3
cluster_4
Claim Amount
32.13595628
646.7065116
429.937594
67.60462253
124.0138065
Coverage
136.2993755
1453.186047
588.8721805
402.1022067
1021.9
Income
46.86104606
199.0813953
109.7518797
83.51800232
134.5645161
Members
2562
86
133
861
310
CLAIM/COVERAGE(
%)
23.57747874
44.50266455
73.01034219
16.8127957
12.13561077
The claim/coverage % is highest for Cluster 2 i.e. 73% and the
members contributing towards the same are also less. But the
average income of the members are significantly high.

9. Clustering Analysis
Types of Claims
cluster
1
2
3
4
5
Grand Total
cluster_0
630
389
589
227
727
2562
cluster_1
10
6
46
19
5
86
86
47
cluster_2
133
cluster_3
228
130
163
70
270
861
cluster_4
95
52
35
15
113
310
Grand Total
963
577
919
378
1115
3952
Cluster 2 contains only claim types 3 (Fire) & 4
(Contamination). Hence, company should focus on
increasing their portfolio bucket by offering other insurance
coverage's i.e. 1 (Wind/Hail), 2 (Water Damage) & 5 (Theft)
.

10. Clustering Analysis
700
T
600
O
W 500
N 400
S
I
Z
E
1
2
300
3
200
4
100
5
0
cluster_0
cluster_1
cluster_2
cluster_3
cluster_4
CLUSTER TYPE
Cluster
>2.5 L (1)
50TH2.499L(2)
10TH49.99TH(3)
2.5TH9.999TH(4)
<2.5TH(5)
Grand Total
cluster_0
668
623
518
435
318
2562
cluster_1
20
21
17
18
10
86
cluster_2
30
28
25
33
17
133
cluster_3
219
208
165
178
91
861
cluster_4
85
70
56
67
32
310
Grand Total
1022
950
781
731
468
3952

11. Recommendations
O On the basis of analysis, we recommend
to the company to concentrate on Cluster
2 markets(towns) where the average
income is high & penetration of different
types of insurance products are less.
O Overall, by reduction in claim/coverage
ratio & increased customer base will
contribute towards higher profitability for
the company.

12. THANK YOU