Illinois State University

Rockford
Mutual
Insurance
Customer Segmentation, Social Media
Tracking, and Competitor Analysis

Report prepared for: Mr. Shane A. Heeren

Prepared by: Kaylea Blunier, Andrew Higdon, and Jocelyn

Perez

Marketing Analytics (MKT 245)- Dr. Horace Melton

Contents
Executive Summary.................................................................................................... 2
Purpose of the Study.................................................................................................. 3
Objectives............................................................................................................... 3
Background................................................................................................................ 4
Method....................................................................................................................... 6
Results........................................................................................................................ 8
Segmentation.......................................................................................................... 8
Discussion................................................................................................................ 20
Segmentation..................................................................................................... 20
Social Media....................................................................................................... 21
Appendix.................................................................................................................. 25

Executive Summary
After meeting with members of Rockford Mutual, our team was assigned two research
topics: a segmentation study and a social media and competitor analysis study. After conducting
background research on Rockford Mutual and Rockford's competitors, we established our
research objectives in accordance with both of our topics. For the segmentation study, we were
provided a customer database, and we ran a cluster analysis using SPSS software on the data
given. Our method was to run multiple analyses excluding or including different variables to find
any interesting natural groupings within the customer database. We found that the most profitable
segment as defined by the cluster analysis is single females under the age of 30 years old. Further
description of the segment can be found in the results section of this report. Our suggestion for
Rockford Mutual in light of the information we found is to take further look into the profitability
of the younger demographic. For the social media and competitor analysis, we used Nuvi social
monitoring software to generate a report on the mentions that Rockford Mutual and its
competitors accumulated on social media over a month long period. We found that Rockford
Mutual has very little social media presence, and thus has little engagement or mentions. Some
social media suggestions we expand upon later include: interaction tips, content marketing ideas,
and involvement suggestions. The following report gives greater insight into our method,
findings, and suggestions based on the output of our study. Our team would like to thank
Rockford Mutual Insurance for the opportunity to work with a real life client and dataset, as well
as their time and efforts exhibited on our behalf.

Purpose of the Study

Purpose of the study is to conduct exploratory research to see if there are any natural
groupings within the data and to analyze the social media presence of Rockford Mutual and its
competitors.

Objectives
1. Segment the auto policy customer database by finding natural groupings within the
database. This research is exploratory with the purpose of data discovery.
2. Conduct social media monitoring and competitor analysis in order to improve social
media presence and better understand how consumers feel about the brand.

Background
Rockford Mutual Insurance is based out of Rockford, Illinois with agents surfacing
throughout Wisconsin and Indian. Rockford Mutual has a mission to be the carrier of choice for
independent insurance agents as well as the reinsurer of choice by Farm Mutual Companies. The
mission set out by Rockford Mutual is accomplished by providing service that exceeds
expectations of their agents, policyholders, and Farm Mutuals. Rockford Mutual also aims to
maintain growth and preserve capital in the process of surpassing customer expectations.
Rockford Mutual Insurance has a portfolio that consists of a variety of products. The
product policies that Rockford Mutual insures include: Personal and Commercial Auto,
Homeowner and Farmowner, Business, Flood, Workers Compensation, and Umbrella packages.
The target market that Rockford Mutual aims to insure consists of middle to upper aged
individuals. This market is non-specific to sex or relationship status. The bulk of business comes
from ages extending from 30 to 74, however the most profitable customers benefitting Rockford
Mutual come from ages 24 to 29.
Distribution for Rockford Mutual serves much like a brokerage dispensary, allowing
agents to work freely throughout the three states of practice. Customers are able to find an agent
with the input of their zip code online. Rockford Mutuals website then provides a list of agents
that are geographically located most convenient for the customer.
Rockford Mutual competes with: Insure One, King Insurance, Spectrum Insurance,
Allstate, State Farm, Pekin Insurance, American Family, Mass Mutual, New York Life, Westfield
Group. They identified their peer competitors as: Pekin Insurance and Grannell Mutual.

Given the growing number of competitors, Rockford Mutual needs to be aware of the
trends in the external environment in order to develop a competitive advantage. These trends will
be broken up into high technology and high budget trends followed by low technology and low
budget trends. The high technology and high budget trends will be discussed first. The first trend
is the involvement of technology. The insurance world is starting to see the adaption of apps and
other technology in order to make the buying, claiming, and insuring process easier for
consumers. An example is the adoption of an application that allows consumers to secure first
notice of loss on site, with photos of the crash. The second growing trend in the market is
autonomous vehicles. Over the next decade, there may be a high probability of seeing
autonomous vehicles in the marketplace. Insurance companies need to be aware of this in order
to learn how to adapt to such changes. Preparations must be made in order to learn if the
consumer, automaker, or technology provider will be held liable and adjust accordingly with
usage based insurance systems.
Next, there is low technology and low budget trends. The first trend is capitalizing on
communication with customers, especially from Millennials. The process starts by using social
media to the companys advantage. Using tools such as Survey Monkey to incorporate on social
media can allow companies to get instant feedback, opinions, or recommendations from their
customers. Having customers take surveys on subject matter that is relevant and useful shows the
core elements of concern or care that lead to maintaining long term relationships. The second
trend is insurance companies looking at crime and health care to adjust prices. With these,
companies may be able to make correlations that lead to better business practices.

Method
On October 7th, members of Rockford Mutuals Research and Development team came
to our MKT 245 class to present on their company and explain the research opportunity they had
for us. The research topics were divided into four categories: a segmentation study using cluster
analysis, a profitability analysis, churn analysis, and a social media tracking study. Our team was
assigned to segmentation and social media. Rockford Mutual made their customer database
available and graciously standardized and organized the data for our class, making it ready for
analysis.
The first step in conducting our analysis was to first gain greater insight into
Rockford Mutual. We performed exploratory research on the company as well as the companys
competitors to get a feel for the industry and to better understand Rockfords competitive
environment.
Second, we familiarized ourselves with the database provided. The database gives
information on Rockford Mutuals customers in regards to their demographic information, policy
plan, profit, insurance score, and insurance history. Both metric and categorical data is provided.
We planned to use this database to analyze customer segments for Rockford Mutual. We also
familiarized ourselves with the output from Nuvi social media tracking software. The search
monitor collected information on Rockford Mutuals social media activity, as well as any
mentions made about the company and the companys peer competitors. We planned to use the
report generated by Nuvi to conduct our social media analysis.

Next, we formed our research objectives in accordance to research category wed been
assigned. For segmentation, we decided a cluster analysis would give us insight into any natural
groupings that may exist within the Rockford Mutual dataset. For the social media analysis, Nuvi
software provides the analytic tools needed to assess the social realm that Rockford competes in.
The next step in our research was to run the analyses. For the segmentation study, we ran
cluster analysis on SPSS software with the goal of discovering any groups that may provide
insight or greater profitability for Rockford Mutual. To do this, we ran multiple cluster analyses,
excluding some variables or adding others. We left profitability out of the actual analysis, using it
as an evaluation variable to classify the clusters and show how each could affect the finances of
Rockford Mutual. We also ran multiple analyses with the insurance score variables (insurance
score, insurance score level, and rate plan) to see if their differences impacted the clusters. For
the social media analysis, we generated a Nuvi report to give us information on all that the
monitor had collected over the month. The report gave us insight into social media reach,
influencers, mention sentiment, and competitors social media tactics. We used this report to
brainstorm ways that Rockford Mutual can enhance the companys social presence and strategy.
We plan to present the findings of our analysis to the Rockford Mutual team on Monday,
November 30th. Our results and suggestions based on the output of our analysis can be
examined in the following pages of this report.

Results
Segmentation
The following tables and graphs are output data from the cluster analyses run on SPSS
software.

Figure 1: Driver Variables and Insurance Score

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Figure 2: Driver Variables and Insurance Score Level

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Figure 3: Age Distribution for cluster #1 in Figure 2

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Figure 4: Driver Variables and Rate Plan

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Figure 5: Marital Status of Cluster#1 in

Figure 4

Figure 6: Driver Violation Points of

Cluster#1 in Figure 4

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Figure 7: Vehicle Variables and Insurance Score

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Figure 8: Vehicle Variables and Insurance Score Level

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Figure 9

Figure 10

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Figure 11: Vehicle Variables and Rate Plan

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Figure 12:

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Figure 13: Multivariable Analysis

Figure 14: Age Distribution for Cluster#3 in Figure 13

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Discussion
Segmentation
To summarize our findings of the cluster analysis, we learned that the most profitable
customers can be described as single females under the age of 30 years. This segment makes up a
small portion of the population, only 14.6%, but their profitability is almost double that of the
other clusters. As mentioned in the "Methods" section of this report, we ran multiple cluster
analyses. Throughout a majority of all the clusters we formulated, profitability is slightly higher
within clusters in which females make up the majority. This is also true for marital status, as
being single seems to have a positive impact on profitability. Interestingly, we found that the
older demographic, ages 30 years old and up, provide a smaller profit as compared to the
younger demographic.
When analyzing the difference between the insurance score variables and the impact they
made on the cluster analysis, we learned that the Rate Plan and Insurance Score Level provide
the same information. The relationship between the insurance score and profit is an inverse
relationship. Likewise, the relationship between insurance score level and profit is and inverse
relationship as well. We observed in our output that a pattern existed: as the score went down the
profit went up. Meanwhile, the relationship between the rate plan and profit is direct. As the rate
plan risk increases, profit from that consumer increases. As a disclaimer, these relationships are
based on the results of data discovery through cluster analysis. We had no target variable in mind
for assessing the correlation between the insurance score/insurance score level/rate plan and
profit. No numerical formula or graphical relationship is presented in our findings, solely a trend
we observed within the clusters.

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As a suggestion, we think it would be beneficial to Rockford Mutual if the company took

a closer look into the results that we've created. Finding ways to target the small but very
profitable cluster of young, single females could provide an opportunity for greater profitability.
Also, it could be useful to assess the pricing policy for the older demographic. Based on our
results, they're the least profitable segment, and finding ways to boost profitability in that
segment could benefit Rockford Mutual's bottom line.
One of the strengths of the segmentation study was the organization and size of the
database we were given. The variables were well described and everything was standardized in a
manner that allowed us to easily run it through the SPSS software. As a team, we'd like to
acknowledge the time Rockford Mutual put into preparing the data for us and our gratuity for it.
As for limitations, one of the underlying principles of data science is that if you look hard
enough at a dataset, you're going to find something. Whether or not that something is useful or
meaningful in any way is up to the scientist to decide. We have reported our findings, and though
we put considerable time into the segmentation analysis, we are limited in knowledge of
Rockford Mutual's business strategies. Our results give interesting insight, but should be further
examined within the context of Rockford Mutual's competencies, mission, and goals before
drawing final conclusions on the segments we have found.

Social Media
To summarize our findings of our Nuvi research, Rockford Mutual should consider being
more active on their social media. We had a very difficult time trying to analyze what their
strengths and weaknesses are because they had not posted within the time frame of our monitor.

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We decided to instead focus on previous posts on their social media and their competitor's posts
to better understand how this industry interacts with their customers.
We first went to Rockford Mutuals Facebook page and there saw that they only have a
few different types of posts on their page. The first kind of post we noticed on there were posts
about their employees, either congratulating them or just acknowledging them. This seems to get
good response from the community, but we believe they could use other methods to appeal to
their target audience. The second types of posts were just different severe weather events that
occurred around the area. Although this is very informative, they did not get much attention from
the consumers.
We then went and checked Rockford Mutuals Competitors social media to better
understand what they do to engage their followers. The first post that really stood out was on
Grinnel Mutual Reinsurance Companys Facebook page. The post seemed to be about a contest
they had called Working Together Making it Better. For the contest a community would submit
a project and the winner would receive a $2,000 grant from Grinnel. This had a lot of interaction
and really got their followers engaged. We then moved to Twitter to get an understanding of what
different companies in the industry are doing on there. Although their competitors seem to be
posting very frequently, they are not getting a big reach, but they still get a lot of mentions from
different companies and consumers.
Here are some conclusions and recommendations from this research. Our conclusion is
that companies in this industry do not normally get to much engagement from their consumers or
followers. There are some posts and tweets that get their attention but for the most part it is a one
sided relationship. The content that does get engagement is usually contests and giveaways but

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this strategy can be expensive for a company to pursue. As a recommendation, we decided that
Rockford Mutual should hold off on getting a Twitter account, and just increase interaction on
their Facebook. We believe a majority of their target market that we found from the previous
section will be on Facebook, so focusing on this platform will benefit them the most. Twitter is
geared towards a very young generation, and for right now that is not where their focus should
be. The first step in making your target market and consumers engage is interacting with them.
By this we mean commenting, liking, and sharing posts that involve the company. We also came
up with the idea that Rockford Mutual should market their Facebook as a place customers can go
to communicate. For example, instead of waiting to get a questioned answered they can simply
post on the page and see if other customers know the answer. Once they have better established
their Facebook presence they can then move some focus on a Twitter account and begin to
engage the younger audiences, since they are future customers. The last couple of
recommendation we have for Rockford Mutual is to focus on content marketing and coming up
with a strategic plan. Content marketing is when a company focuses on providing the consumer
with valuable content in order to change or enhance some type of behavior. This is one of the
best social media strategies a company can use because they can really focus on their target
market. Strategic planning is a great way for a company to really take time and analyze how they
are doing on social media, what improvements they should be making, and what posts are
benefitting them the most.
There were a few strengths and limitations we found throughout the research process.
The strengths were that they did have some good social media content previously and just
needed to take that and create new posts to see what their customers are looking for. Some of the
limitations were the fact that they had not had any social media presence during the time of our
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research Nuvi is a great program that could have really provided good insight, but with the lack
of data we were unable to get some valuable information.
For the future we are hoping that Rockford Mutual will take some of these
recommendations and put them into action. After making changes to their social media they
should run another tracking study and see what is working for them and what area still needs
improvements.

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Appendix
The remaining pages of this report are the results obtained from the social media tracking
software.

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