## Interview Question

Senior Data Analyst Interview

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# case study: credit card insurance profit per customer cost of mailing \$0.5, response rate 1%, average balance per month \$1000, insurance charges 1% of average balance monthly, customer claim rate 5% (once insured customer files a claim, the balance will be wiped and C1 lose \$1000). Question: profit per customer, graph claim rate vs response rate, graph profit vs response rate and find the response rate for maximum profit (r=1%)

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## Interview Answers

3 Answers

4

btw, there is no enough info to determine response rate vs claim rate here. they appears independently in the question. I guess you have to clearly ask for info here.

Anonymous on

11

this case is so common that I've seen it more than 4 times on Glassdoor. Aspirant you are wrong because premiums are paid monthly, while loss is assumed yearly. This has already been a "must case" for analysts interviews. If you are tested on this at year of 2013, 2014 and have no idea how to solve it, shame on you.

Anonymous on

50

Can you write the profit equation for credit insurance case. Shouldn't it be P = Rev - Cost = x*(1/100)*1000 - x*(y/100)*1000 - 100*0.5 Where x- response rate, y - claims rate (assumption 100 mails sent) How are u getting the response rate for max profit as 1%. Isn't profit always negative here.

Aspirant on

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