I recently had to solve the following market sizing question:
"Estimate the number of independent insurance brokers in Germany"
- Clarify the scope of the market sizing (here: only independent insurance brokers, assumption single brokers, private households)
- Estimate the number of insurance policies of private households (80m people, average household size of 3 - 27m households, average policies per household - 13-14 based on available insurance types and assumption that 2 adults per household and one children = c. 380m policies)
- Estimate the share of independent insurance brokers (~30%, other channels would be single firm/multifirm agencies, direct distribution/internet/apps = thus insurance brokers have to administer 30% or ~130m policies )
- Estimate the available capacity per insurance broker (assumption: 220 days of work, 9 hours per day = 1980 hours per year, thereof - split of activities: 20% for check of claims, 30% for administrative tasks, 20% for customer care, 30% for policy acquisition)
- Identify number of new policies (assumption: households change their policies every 4 years - thus 130m/4yrs = ~33m new policies per year)
- Calculate the number of insurance brokers (each insurance broker has 30% time for policy acquisition, thus 30% of 1980 hours = ~600 hours; 33m new policies, which on average require one hour of consultancy mean 33m required hours/600 available hours per broker = ~ 55,000 brokers)
Would that work in your opinion? Official number is 48,000.
Thanks in advance.