Mutual of Omaha Tests Auto Mailing, List Modeling with ICOM

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Mutual of Omaha is expanding its use of the TargetSource database from ICOM Information & Communications Inc., Toronto, to include tests for marketing auto insurance by direct mail and tests for using modeling to generate new lists for one of its life-insurance products.

The Omaha, NE, insurance provider is in the preliminary stages of the auto-insurance test and is preparing a second mailing to verify the success of an initial modeling effort for one of its senior-age life insurance products.

"It's produced an acceptable response," said Dick Mendenhall, vice president of production at Mutual of Omaha. "Without giving numbers, it's maybe given a lift in response to some areas [compared to using straight selects]."

To produce the modeled list, ICOM used the entire senior-age life insurance file from Mutual of Omaha and matched it against the database that ICOM has built from its survey-generated database of 15 million U.S. households. The modeling process compares data from current customers against a general database of consumers to determine what characteristics might be used to generate a target list from the general database.

"It seemed like we were able to go a little bit deeper into the file," Mendenhall said, adding that the company now is in "the validation stage" of the modeling test.

He said it was too early to discuss results from the auto-insurance test, which was mailed last month.

"Auto insurance is a very special animal compared with most insurance products," said David Clark of Clark MacKain, New York, the list broker for Mutual of Omaha. "With auto, they are going after a narrow and very specific market."

The test, which Mendenhall described as very small compared to the overall direct mail efforts at Mutual of Omaha but large enough to produce statistically significant results, marks the first time Mutual of Omaha has attempted to sell auto insurance via direct mail, rather than through agents.

Mutual of Omaha has been using the ICOM database for about five of its insurance products for about six years, since it has been available in the United States. The database is compiled using extensive surveys that are mailed to about one fourth of the households in the U.S. every six months.

Although the ICOM database includes information about what auto insurance companies consumers use and when their policies expire, that data has not yet been used in Mutual of Omaha's test mailings, Mendenhall said.

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