The S’No Risk Program
By: Blaine Berry
Argosy University
July 2, 2017
Background
Toro Company was founded on July 10, 1914, by building engine tractors and later branched off into lawn mowers. During the early 1960’s the company began to add snow throwers. After a few years of snow throwers, Toro started to offer a full range of outdoor care for the residential and commercial customers. The residential products constituted 40-50% of sales with the snow throwers at 10-15% of all sales. Today, Toro is the world’s largest lenders in maintenance equipment and landscape. In this paper, I will provide the analysis of the increase insurance rates, objective prospectus, outlining the program success and the purchasing decision of the consumer.…show more content… This program helped provide incentives for consumers with the opportunity for them to redeem their purchase cost based on snowfall recordings. The new refund policy is helpful for the consumer and the insurance premiums. The first structure would offer a 100% refund for 10% or less snowfall. The second structure would offer 50% refund for 10% snowfall. I believe Toro refund guidelines are better than the old guidelines whereas Toro loss profit.
These new guidelines will allow the insurance premiums to create value for the consumer and value for the insurance premiums. This new program will help people with heuristic, which allows the customer to estimate the percentage of snowfall from the previous years before making their purchasing…show more content… • I would not change the policy of annual snowfall percentage.
• The dates August 1- November 15 are good because this will cause higher payouts.
• I would improve on conducting an analysis of the risk and data to determines the best times for sales and promotions and not extending promotions. The insurance company lost money with a 2.1% rate so I would take the necessary steps with preparing data.
Evaluation
With the development and improvement of the refund structure policy, its determined that the program was successful. The sale of the snow throwers peaked with manufacturing 2,500 machines. The American assurance insurance helped create a scale whereas customers are happy and still purchasing snow throwers. The only pitfall with this new policy is that American Assurance Insurance premium loss was 2.1 and made a profit from this decision, but the rebate structure and consumers covered regardless of snow rate, this can cause the insurance to lose
