I am getting a much larger number and I was hoping someone could clarify where I may have went wrong if you can get the same answer as listed below.
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Is anyone able to help with the calculation that goes into the Insurance Case study from Wharton 2017 Casebook?
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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
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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
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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
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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!
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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
(edited)
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