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Start your case study practice now with this Booz Allen Hamilton case study.

Case Intro

A health insurance company experienced a loss of $40M this year, after recording a $40M profit last year. The company is in only one line of business, Commercial Risk Insurance, in only one region. They have several direct competitors.

Revenues have been stable from last year to this year. Premiums charged per member have been stable at an average of $200/year, and membership has been flat at 4 million members. Per member variable costs are rising by $20/year. This is largely the result of a decline in utilization of resources due to poor management. Their cash flows originate from premiums, which are paid in on a periodic (e.g. monthly, semi- annually, annually) basis by its customers, and claims are paid out to the customers’ caregivers as appropriate.

For the sake of simplicity, the company’s Profit = Premiums – Claims.
Currently this company has 4 million members, which equates to a 40% market share. All revenue, cost and profit figures are measured on a per-member basis.

How would you go about identifying potential solutions for their decline in profitability?

Case Overview

The client in this Booz Allen Hamilton case study is a health insurance company that experienced a large loss this year. Your task in this business problem is to identify the causes of the decline in profitability, and potential solutions to reverse the decline.

Incorporate the Profitability Framework into your structure for the case, but don’t rely on that framework alone. Blend your knowledge of the basic frameworks and your business acuity to build a framework that is custom-built for the business situation in this case.

This case doesn’t have any math charts or graphs to interpret. You could expect to find this case in a first or second round Booz Allen case interview.

Interview Tips: Booz Allen Hamilton

What does BAH look for in its case interview candidates? High-level presentation and interpersonal skills.

Emphasize clear and concise communication throughout the case  – especially during your final presentation/recommendation.

For high-quality case study practice, find one potential area for improvement in this case.

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