All companies believe in strong customer relations, but what the best of them know, is that not all customers are equally profitable. The challenge therefore, is to identify customers based on their levels of profitability, so that insurers can select different target groups for specific products. Insurance analytics tools and techniques such as profitability analysis, survival analysis, and forecasting can make a valuable contribution when used in tandem with the Customer Life Time Value (CLTV) model.

The CLTV model segregates customers based on their future profitability and helps insurers create a database of high value customers who will generate the greatest profit in the long run. The CLTV model can help insurers lower market costs, identify the right target clientele, price their products correctly, retain current customers while increasing up-sell and cross-sell opportunities, and customize products based on a deep understanding of customer needs.