How can we explain the sudden 30% decrease in new applications for Pie Insurance's pay-as-you-go workers' comp policies in the past two weeks?

Introduction

A sudden 30% decrease in new applications for Pie Insurance's pay-as-you-go workers' comp policies over the past two weeks is a significant issue that demands immediate attention. This analysis will systematically identify potential root causes, validate hypotheses, and propose solutions to address both short-term and long-term implications.

To tackle this problem, I'll follow a structured approach that covers issue identification, hypothesis generation, validation, and solution development. My goal is to provide a comprehensive analysis that not only addresses the immediate concern but also strengthens our product and processes for the future.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a seasonal factor at play. Has this 30% decrease been compared to the same period last year?

Why it matters: Seasonal trends could explain sudden changes and help us differentiate between cyclical patterns and actual problems. Expected answer: Yes, it has been compared, and this decrease is unusual for this time of year. Impact on approach: If seasonal, we'd focus on why this year is different; if not, we'd look more closely at recent changes or market shifts.

• Considering the specificity of the decrease, I'm wondering about our measurement systems. Have there been any recent changes to how we track or calculate new applications?

Why it matters: Ensures we're not chasing a phantom problem caused by data collection or processing issues. Expected answer: No changes to tracking or calculation methods have been made recently. Impact on approach: If there were changes, we'd audit the new system; if not, we'd focus on external factors or product issues.

• Given the pay-as-you-go nature of the product, I'm curious about our target market. Has there been any significant shift in the types of businesses applying for these policies recently?

Why it matters: Changes in applicant demographics could indicate market shifts or targeting issues. Expected answer: No significant changes in applicant demographics have been observed. Impact on approach: If demographics shifted, we'd investigate market trends; if not, we'd look more at our product offering or competitive landscape.

• Considering the competitive nature of insurance, I'm thinking about our pricing strategy. Have we or our competitors made any recent changes to pricing or policy terms?

Why it matters: Pricing changes could directly impact application rates and market competitiveness. Expected answer: We haven't changed our pricing, but we're unsure about competitors. Impact on approach: If pricing changed, we'd analyze price elasticity; if not, we'd investigate other product or market factors.