Is anyone able to help with the calculation that goes into the Insurance Case study from Wharton 2017 Casebook?

Hi Alek,

My best guess here is that the case answer is incorrect since I get a total market size of $7.5B if the market is defined as strugglers + aspirers

Strugglers: $2,000 * 2% * 33M = $1,320,000,000

Aspirers: $7,500 * 1.5% *55M = $6,187,500,000

Seems that they only included the aspirers market size in the answer.

-A 

Hi, 

You need to add strugglers here : $2k * 2% * 33M = $1,32 Bn

However, willing to spend is not exactly the size of the market but more the potential !

Next step is to ask if all potential is addressed or not, effective market size could therefore be lower than that. 

Best, 

David

Hello,

You are right, the proposed solution is wrong. 6 billion is the potential market of the Aspirers segment, you need to add the strugglers one.The right solution is:

Market size= Aspirers market + Strugglers market = 6.2 Billion + 1.3 Billion = 7.5 Billion

Best,
Luca

Agree with you. 

The 6 Bn only includes the aspirers, altough -in my reasoning- you should add on top the 1.5 Bn strugglers.

Hope it helps!

Cheers,

Clara

Hi Alek,

Agree with the rest.

Do note that most casebooks have one or two mistakes - it's quite common...they were written by humans after all!