How would you approach this market sizing question?
Market Sizing: "How big is the life insurance market in Germany?"
I would go with the "top-down" approach for this - high level - you can definitely refine it
Step 1: find a driver or proxy of the general penetration in the population for the object involved in the market sizing: in this case i would say households are a good proxy
Step 2: segment your proxy - for example here you could segment by willingness to buy excluding some categories of houselholds (e.g. based on non-affordability of the premium), substitutes (people saving by their own, etc...) and other % that reduce the "potential" market
Step 3: asses average # of policies per household - here I would say from the outside, pretty high for the german market (> 1 policy/ HH)
Step 4: multiply it all
If this is a question about the overall market - make sure to be precise in terms of the overall opportunity related to all the policies in place (the above) - otherwise if this is an annual figure for a player in the space you should take into account
1) Replacement rate of policies (how many years for a new policy to be issued?) - therefore the total opportunity should be divided using the replacement rate (e.g. if people by life insurance every 4 years then it is the above / 4)
2) Assessment of the market share (only relevant if we are talking about a single corporation inside the market)
Hope it helps
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