Price and Profit Optimization for Financial Services

Price and Profit Optimization for Financial Services

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Prospective customers of financial and insurance products can be targeted based on the profit the provider expects to earn from them.We present a model for individual expected profit and two alternatives for calculating optimal personalized prices that maximize the expected profit.For one of these alternatives, we obtain a closed-form expression for the price offered satisfyer pro penguin next generation to each prospective customer; for the other, we need to use a numerical approximation.In both approaches, the profits generated by prospective customers are not immediately observed, given that the products sold by these companies have a risk component.We assume that willingness to pay is heterogeneous and apply our methodology using real data from a European insurance company.

Our study indicates that a substantial boost in beer button down shirts for men profits can be expected when applying the simplest optimal pricing method proposed.