Help with Business Plan

[kstein]

I need some feedback. I am working on my MBA and the class I'm in right now is a business plan from start to finish.

At present, I work in the senior market (8+ years in MA Med Sup etc) and I have ventured into the ACA.

For this class, I am using the ACA market as an "expansion" to our agency. The business plan has a financials section where I need to make assumptions on target market size, commission per sale, response rate, appointment rate, close ratio, and length of policy.

Here is what I'm referencing:

40,00 total people in target market, at 1% direct mail response = 400 leads. 50% appointment rate = 200 appointments, close ratio of 50% = 100 sales, average commission per sale $500 = $50,000 in first year revenue - direct mail expense ($16,000 $400/thousand x 40) = profit of $34,000.

I'm having trouble finding "evidence" of what appointment rate, close rate, and length of policy would be for the ACA. I know direct mail is around 1% average. Does anyone have any thoughts on this?

Thanks in advance.

 

[Ann H]

When?

During open enrollment, you may get those appointment rates and close rates. Your response rate may be much higher than 1% during OEP.

After OEP, unless you are doing group insurance, or targeting people who may have an SEP, you won't get that ratio of appointment and close rates.

Length of policy previously was 3 years. With Obamacare, it's anybody's guess.

 

[kstein]

What about an average of both. Any thoughts? How about independently of each other. Outside OE specifically

 

[russelltw]

Think of your experience with 65+ AEP. That's likely what under 65 will be like. Lots of interest during the OEP, but much smaller chance to get coverage outside of OEP.