Hi,
I was just wondering why this made sense in the essay question -
"Average premiums much smaller for YOUTHSURE… [1]
• Therefore they require more sales… [1]
• To achieve meaningful absolute profits [1]
• Fortunately sales have been steadily increasing…
• … ten fold growth in 2 years"
Average premiums are much smaller for Youthsure (1/10 compared to Prestigelife) however it has an approximately 40 times greater profit margin.
Does this not mean that for every policy sold you still make 4 times the amount of profit for Youthsure compared to Prestigelife?
If so then why does the answer above make sense? For instance why does Youthsure need more sales to make more meaningful absolute profits, as on average for each policy sold Youthsure will earn more.
I was just wondering why this made sense in the essay question -
"Average premiums much smaller for YOUTHSURE… [1]
• Therefore they require more sales… [1]
• To achieve meaningful absolute profits [1]
• Fortunately sales have been steadily increasing…
• … ten fold growth in 2 years"
Average premiums are much smaller for Youthsure (1/10 compared to Prestigelife) however it has an approximately 40 times greater profit margin.
Does this not mean that for every policy sold you still make 4 times the amount of profit for Youthsure compared to Prestigelife?
If so then why does the answer above make sense? For instance why does Youthsure need more sales to make more meaningful absolute profits, as on average for each policy sold Youthsure will earn more.