Insurance Feedback

[JasonLJJ]

David & CapLab Dev Team,

I would like to take the chance to congratulate you on the insurance business - I have played the work-in-progress version and it looks very close to the finish line!

A couple of thoughts:
Takes too long for revenue to grow - It was literally increasing insurance revenue between low single digits to 15% per year every year before plateuing to 3-5% a year.
Take too long for firm to breakeven on a purely underwriting basis - it took 20+ years for the firm to breakeven without any competition. With more than one firm in the market, it should take even longer, if ever, for the firm to even breakeven. Perhaps you can raise the premium slide to max of 120 to leave room for firms to compete with each other?
Bugs that need to be fixed (i.e. game crashes when purchasing bonds, you can transfer more cash than you actually hold)
Also one major bug is that the insurance businesses purchases in local stock market can exceed 100% - see screenshot below
No obvious way to take market share / grow revenue from insurance business

Suggestions:
1) Fix bugs listed above
2) Add option to deposit money in bank
3) Add a slider to invest in distribution - spending money on distribution will allow firm to gain market share / premium quicker
4) Increase maximum premium charged to 120% instead of 100%
5) I think the total size of the insurance market should be larger and growing in-line with population.

Could it be possible for the demand / size of car insurance market be correlated with car sales, the demand for home insurance be correlated with the population of a city while the demand for life insurance be correlated with the amount of deposits?

I think car insurance premiums per year should be 1-3% of total car sales revenue while home insurance should be a % of total GDP (i.e. 1%?)

Life insurance should be also a % of total GDP (3%?)

A slider that allows gamers to decide on the size of insurance market (similar to what you do for banking) would be great. Max should be around 2000? (same as banking)
6) For home & car insurance, there should be something called "exogenous events" (i.e. hurricane) that leads to a spike in premiums for a specific year only. Create a button that allows players to turn on / off the exogenous events.

[Traveo]

With insurance, I also wonder why there isn't any small business or corporate insurance option as well?

[JasonLJJ]

I agree

Let's take baby steps. Point is we are close to a prototype that is good enough for the game; it just needs some tweaking and some of the numbers need to be increased quite a bit in order for the insurance business to be sustainable

[JohanPB]

Did I miss something? I don't see the option to create an insurance branch.

I'm on 6.2.02

[David]

With insurance, I also wonder why there isn't any small business or corporate insurance option as well?

What are your ideas for this, in terms of gameplay mechanics ?

I did a quick search on the net:
https://www.thehartford.com/small-busin ... -insurance

It states that there are 3 main types of insurance for small businesses:
>General liability and property insurance
>Workers’ compensation insurance if you have employees
>Commercial auto insurance if you or any employees use vehicles for work purposes

But we don't have these risks in the game except fire.

[David]

Suggestions:
1) Fix bugs listed above
2) Add option to deposit money in bank
3) Add a slider to invest in distribution - spending money on distribution will allow firm to gain market share / premium quicker
4) Increase maximum premium charged to 120% instead of 100%
5) I think the total size of the insurance market should be larger and growing in-line with population.

Hi Jason, thanks for your inputs. I will forward them to the dev team.

No obvious way to take market share / grow revenue from insurance business

Please be informed that the dev team is still working on the gameplay balance and this will be improved in the next version 6.3.00. When it's done, you should be able to compete on prices (insurance premium prices), brand (insurance company brand) and quality (quality service).

For "3) Add a slider to invest in distribution - spending money on distribution will allow firm to gain market share / premium quicker", will there be a new indicator showing the distribution strength of the insurance company, or it is just a hidden variable that affects the insurance's company to gain market share?

On a related note, there is a suggestion for implementing a mechanic that strengthens the incumbency advantage for established banks, which works in an opposite way - making it more difficult to take market shares from existing ones. While it refers to banks, not insurance companies, but the general concept may apply to both.

The original posts can be seen at:
http://www.capitalism2.com/forum/viewto ... =52&t=7086
http://www.capitalism2.com/forum/viewto ... =52&t=7121

Do you think these two mechanics may be contradictory to each other? If so, should we just leave the game as it is without introducing any new mechanics to make it easier or harder to take market shares from competitors?

A slider that allows gamers to decide on the size of insurance market (similar to what you do for banking) would be great. Max should be around 2000? (same as banking)

It will be available in the version 6.3.00. The max on the new game setting menu is 600 but it could be set up to a maximum of 2000 using a script -- the same as banks.

6) For home & car insurance, there should be something called "exogenous events" (i.e. hurricane) that leads to a spike in premiums for a specific year only. Create a button that allows players to turn on / off the exogenous events.

While this could a good idea for insurance gameplay, but users would expect some kind of visual depictions of these exogenous events. If the game just announces that there is a hurricane and no houses get damaged visually, users may question why it works that way.


----------------------

And it would be helpful if you could send me your save game file for investigating the bond crash bug. I just tested buying bonds using my insurance company a few times and didn't experience any crashes.

You may email the save game file to me at info@enlight.com or send it to me via forum PM (private message). Thanks.

[David]

Did I miss something? I don't see the option to create an insurance branch.

I'm on 6.2.02

Strangely, it seems that some users are able to access the insurance feature which is still under development and not completely ready for beta release yet. This could be due to a bug. I just tested the installer version and I couldn't access the insurance feature.

[JasonLJJ]

Looking forward to the proper release of the insurance feature David

I think some of the things I raised regarding the insurance market size and the intensity of competition is worth addressing before we go live with the feature.

[JasonLJJ]

On stickiness of market share:

Given that this is a simulation, I think it makes sense to make the market more competitive as to provide players the opportunity to "fight it out" with AI. The whole point of creating another attribute is to give the player one more area to invest into in order to allow for differentiation - operational efficiency is a very important aspect of competitive advantage in the real world.

I'm more concerned about the cyclicality and correlation of the various insurance products - new auto insurance is generally correlated with # of cars in the market / new car sales with more expensive cars requiring higher amount of insurance. Life insurance is generally seen as a savings product and hence should be correlated with savings rate / GDP growth. The same applies for home insurance. Hence, I think it makes sense for there to be a degree of correlation in the growth of the market size with the size / growth rate of the respective markets.

Typically, auto insurance is about 1-2% of the car value. The life insurance market for a developed economy is around 3-6% of GDP. Hence, I think this should be the approximate market size for the life insurance industry.

https://www.mckinsey.com/~/media/mckins ... -2018.ashx

David - any chance you can take a look at my suggestion for the deposit sweeping mechanism for the city government too?

[swordman59]

I've been using the insurance feature aswell recently, and the way that I've been able to access it has been through the banking and finance section of firms, then below the bank headquarters and bank branch, their are 3 blank sections and when you select them you get insurance headquarters, insurance office, and the stock broker. However, only the insurance firms work in any capacity as the stock broker is still a blank firm.

I do agree the profitability needs to be worked on with the insurance business, but I'm waiting for the official beta release before doing too much work with it.