CBAP · Question #419
An insurance company wants to increase sales by 15% and customer retention by 10% within 1 calendar year. Various strategies to achieve this were considered and a restructure to the existing pricing…
The correct answer is A. Onion diagram. The onion diagram best represents the layered, hierarchical structure of discount tiers based on nested criteria such as premium level and customer loyalty.
Question
An insurance company wants to increase sales by 15% and customer retention by 10% within 1 calendar year. Various strategies to achieve this were considered and a restructure to the existing pricing model is selected to help achieve these goals. A business analyst (BA) works with stakeholders such as actuaries, product specialists, sales staff, risk managers, and underwriters who agree to applying varying levels of discounts to customers based on:
- Total annual premium the customer has with the company (Financial worth)
- Time with the insurance company (Loyalty)
Various financial models are considered but the stakeholders agree that an initial applicable discount is determined based on the customer's overall premium:
The percentage of the maximum possible discount available to the customer is adjusted based on time with the company:
What did the BA create to ensure that everyone who needed to be included had been?
Options
- AOnion diagram
- BConcept model
- CCapability diagram
- DContext model
How the community answered
(43 responses)- A74% (32)
- B14% (6)
- C5% (2)
- D7% (3)
Why each option
The onion diagram best represents the layered, hierarchical structure of discount tiers based on nested criteria such as premium level and customer loyalty.
An onion diagram uses concentric rings to display nested layers or levels, making it ideal for representing tiered discount structures where each ring represents a progressively greater level of customer value based on financial worth and loyalty. It visually communicates how customers move through different discount bands, clearly showing the relationship between the layers of criteria used to determine discount eligibility.
A concept model shows relationships between business concepts and terms, not hierarchical tiered structures built around nested qualifying criteria.
A capability diagram maps an organization's abilities to deliver value at a strategic level, not a customer-facing pricing tier model.
A context model defines the scope and boundaries of a system by showing external entities and interactions, not internal layered discount logic.
Concept tested: Onion diagram for layered hierarchical business structures
Source: https://www.iiba.org/career-resources/a-business-analysis-professionals-foundation-for-success/babok/
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