Customer segmentation, return and risk management: An emprical analysis based on BP neural network

In an artificial neural network, simple artificial nodes called "neurons" are connected together to form a network which mimics a biological neural network. BP neural network has been widely used in training artificial neural network. In this paper, by using BP Neural network and data mining method we find out the influence factor of optimal compensation rate in insurance companies. According to the data analysis, the insurance company should make corresponding strategies: first, make a relative low settlement ratio to the customers who have driving experience in 1-5 years, especially in 1-2 years; second, make a higher settlement ratio to the customers that have driving experience more than 5 years, the final purpose is to keep the existing customers, and be able to attract some potential customers.