International Journal of Database Theory and Application Vol.7, No.1 (2014), pp.25-36 http://dx.doi.org/10.14257/ijdta.2014.7.1.03 ISSN: 2005-4270 IJDTA Copyright ⓒ 2014 SERSC A Case Study of Applying SOM in Market Segmentation of Automobile Insurance Customers Vahid Golmah Department of Computer Engineering, Neyshabur Branch, Islamic Azad University, Neyshabur, Iran v.golmah@in.iut.ac.ir Abstract Over the last decade, it has been observed that automobile insurer organizations are being tasked with a new challenge characterized by increased competition, increased requirements of automobile insurance quality and an increasing emphasis on time-to-market. Furthermore, knowledge regarding what customers think, what they want, and how to serve them is quite useful for insurance organization wishing to generate suitable strategies in competitive markets. Keywords: Data mining, Self Organization Maps(SOM),Customer Relationship Management(CRM), Customer segmentation, Automobile insurance 1. Introduction Nowadays, how to make marketing strategies has been an essential issue for automobile insurance industry [1]. Automobile insurance aims at covering different types of claim incurred as a result of traffic accidents which after joining World Trade Organization, insurance industry has rapid growth. Over the last decade, it has been observed that automobile insurer organizations are being tasked with a new challenge characterized by increased competition, increased requirements of automobile insurance quality and an increasing emphasis on time-to-market. Furthermore, knowledge regarding what customers think, what they want, and how to serve them is quite useful for insurance organization wishing to generate suitable strategies in competitive markets. Owing to disparate desires, interests, and needs, gaining a comprehensive understanding of customers is difficult. Since an organization cannot normally serve all customers in a market [2]. The diversity of customers' preferences and needs is a challenge for insurer organization to manage their customers through providing a variety of attractive, personalized, and satisfactory service [3]. Therefore customer segmentation can improve archiving to marketing purposes. Customer segmentation divides customers into groups, with the members of each group having similar needs, characteristics, or behaviors. Segmentation also represents the key element of customer identification in customer relationship management .After segmenting customers, organizations can then use further strategies such as customer attraction to maintain relationships with customers and gain more profit from them, one-to- one marketing, and detecting and predicting changes in customer behaviors'. Online Version Only. Book made by this file is ILLEGAL.