Episode 52: Allocations for the Insurance Industry

Guest: Chris Willson

Isn’t profitability the same as revenue? Why does the difference matter?

If these questions sound boring, how about this one: How would you feel if you went out to an expensive dinner with your siblings and agreed ahead-of-time to split the check equally, but then one sibling orders (and consumes) twice as much as anyone else?

Shouldn’t they pay their “fair share”?

This comes up in business when there are multiple entities competing for resources. For example, product lines competing for marketing investment, or sales teams competing for incentives to pass on to their biggest customers. It’s easy to report on the top-line revenue associated with a product or a customer, but getting to its true value to the business means taking into account all the associated