What is profitability analysis in SAP FS-PM - Policy Management?

SAP Term: profitability analysis

• Component: FS-PM

• Component Name: Policy Management

• Description: An evaluation of the process of a policy or defined in-force policies. For the period under review the following are taken into account: Losses incurred and/or reported Compensation payments made and costs incurred, including reserves set up Premiums earned The quotient calculated from losses incurred and premiums loss ratio provides information about the combined loss and cost ratio as well as the technical profit/loss. This is used as a key figure to rate the profitability and the reassessment requirement of a policy or in-force policies.

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• Key Concepts: 
  Profitability Analysis (PA) is a component of the Financial Services (FS) Policy Management (PM) module in SAP. It is used to analyze the profitability of a company’s products, services, and customers. PA helps companies identify areas of potential improvement and optimize their operations. 
  
  How to use it: 
  PA can be used to analyze the profitability of a company’s products, services, and customers. It can be used to identify areas of potential improvement and optimize operations. PA can also be used to compare different products or services and determine which ones are more profitable. Additionally, PA can be used to analyze customer profitability and identify customers who are more profitable than others. 
  
  Tips & Tricks: 
  When using PA, it is important to consider all factors that may affect profitability. This includes costs associated with production, marketing, and distribution as well as customer preferences and market trends. Additionally, it is important to consider the long-term effects of any changes made in order to ensure that they are beneficial in the long run. 
  
  Related Information: 
  For more information on PA, please refer to the SAP Help Portal or contact your local SAP representative. Additionally, there are many online resources available that provide detailed information on how to use PA effectively.