Executive summary: Based on given conditions our recommendation is to launch AssetsGuard insurance product line for the following reasons: * product’s contribution margin under conservative estimates is at 79% which represent a very lucrative product profitability * estimated sales of AssetsGuard are at 8,759 new policies for the next year at monthly premium of $18.74 will generate revenue of $1,969,684 with 26.5% profit margin * monthly premium price of $18.74 (market average is $21.50) puts InsuOn at a very strong competitive position under current market conditions, with additional room for the future price increases while remaining competitive * at these price and coverage levels company will have market …show more content…
In addition, InsuOn still have room for the price increase while remaining competitive. Contribution margin of 79.9% creates a great opportunity to raise overall product portfolio’s margin to the 45% target. Using regression model, based on penetration rates of 60 competitors, with policy monthly premium price of $18.74 and $40,000 coverage yields an industry leading 14.26% conversion rate that paves the way for a higher future sales of the product. There are many noticeable advantages of the AssetsGuard product that may contribute to a successful sales generation: * highest in the market coverage of $40,000 versus market average of $20,000 for similar products * perceived value of the product by the customers is high * product name stickiness is more than 50% * established FIT attorney network and convenient claim process * FIT early alert monitoring service * bypassing "middleman" by direct internet sales strategy and passing on the savings to the