Rough Set Theory in analyzing the attributes of combination values for the insurance market Jhieh-Yu Shyng a, * , Fang-Kuo Wang b,c , Gwo-Hshiung Tzeng d , Kun-Shan Wu e a Department of Management Information Science, Lan-Yang Institute of Technology, No. 79, Fu-Shin Rd., To-Chen, I-Lan 621, Taiwan b Department of Risk Management and Insurance, Ming-Chuan University, No. 250, Sec. 5, Chong-San N. Rd., Taipei 111, Taiwan c Graduate Institute of Management Sciences, Tamkang University, 151 Ying-chuan Road, Tamsui, Taipei 25137, Taiwan d Department of Business Administration, Kainan University, No. 1 Kainan Rd., Luchu, Taoyuan County 338, Taiwan e Department of Business Administration, Tamkang University, 151 Ying-chuan Road, Tamsui, Taipei 25137, Taiwan Abstract Based on Rough Set Theory, this research addresses the effect of attributes/features on the combination values of decisions that insur- ance companies make to satisfy customers’ needs. Attributes impact on combination values by yielding sets with fewer objects (such as one or two objects), which increases both the lower and upper approximations. It also increases the decision rules, and degrades the precision of decisions. Our approach redefines the value set of attributes through expert knowledge by reducing the independent data set and reclassifying it. This approach is based on an empirical study. The results demonstrate that the redefined combination values of attributes can contribute to the precision of decisions in insurance marketing. Following an empirical analysis, we use a hit test that incorporates 50 validated sample data into the decision rule so that the hit rate reaches 100%. The results of the empirical study indicate that the generated decision rules can cover all new data. Consequently, we believe that the effects of attributes on combination values can be fully applied in research into insurance marketing. Ó 2005 Elsevier Ltd. All rights reserved. Keywords: Rough Set Theory; Combination values; Insurance marketing; Decision rule; Expert knowledge 1. Introduction An understanding of customer consumption trends, and purchasing intentions and behavior is very important in sales and marketing. It is well known that customer satisfaction with products or services is an important key to achieving suc- cessful business operations and sustaining competition. Cus- tomer satisfaction is a critical issue in keeping customers, so measuring the impact of buying behavior on customer satis- faction is critical to understanding customer needs. Custom- ers’ repurchase intentions and the retention of customers is driven by customer satisfaction (Kim, Ferrin, & Rao, 2003). The fulfillment of customer needs is related to satisfying customer expectations, which achieves customer satisfaction. The insurance industry needs face-to-face contact with customers in order to provide services that satisfy custom- ers’ needs so that they continue buying insurance, and/or to repurchase products. This is the main source of reve- nue for the industry. Due to its specialized nature, the insurance industry needs up-to-date information in order to modify products or services to attract potential cus- tomers. The best source of data is a market survey, the results of which may provide information about custom- ers, such as their needs, purchase intentions, and service requirements. We have designed a questionnaire about insurance prod- ucts, purchase intentions, the budget for the premium, and participants’ basic data that may serve as the basis for under- standing their needs. The consumers’ purchasing decisions and processes are analyzed, and proper marketing strategies and management operations are proposed. The results may 0957-4174/$ - see front matter Ó 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.eswa.2005.11.002 * Corresponding author. Tel.: +886 3 9777997. E-mail address: shyng@mail.fit.edu.tw (J.-Y. Shyng). www.elsevier.com/locate/eswa Expert Systems with Applications 32 (2007) 56–64 Expert Systems with Applications