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Making Programs Successful

Aim at 80% of the group

It is a statistical fact that every group consist of better and worse risks. The average risk determines the premium of a policy. If you want to develop a cheaper premium one needs to avoid the worst risks.

Beneficial group insurance programs aim at the ‘better’ 80% of the group. It should provide alternatives for the other 20%, but the initial program and premium should not be affected. This can be done easily using targeting techniques. E.g. an insurance program for business vehicles can exclude specific risk groups.

Avoiding the worst risks not only lowers the necessary premium, and the administrative costs, it will also increase the positive brand awareness associated with the program.

80 20 rule

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