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The excessive paperwork used to process claims at Brakeland Insurance

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The excessive paperwork used to process claims at Brakeland Insurance  [#permalink]

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New post 31 Dec 2017, 08:48
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59% (02:13) correct 41% (02:27) wrong based on 266 sessions

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The excessive paperwork used to process claims at Brakeland Insurance Company, not the increase in accident claims involving privately owned cars, is responsible for the declining profits at Brakeland since the appointment of its new CEO. Sterling Auto Insurance Company has seen a similar increase in accidents among its insured vehicles, but while Brakeland's profits have decreased, Sterling's have increased in the same time period.

Which of the following, if true, would most weaken the argument above?

A) Brakeland is experiencing a decrease in corporate insurance claims that have to be paid.

B) Sterling’s customer-service approval ratings have always been higher than Brakeland’s.

C) Both Brakeland and Sterling have experienced an overall rise in claims.

D) Individual policies traditionally account for the majority of Brakeland's profits, while corporate policies have accounted for the majority of Sterling's.

E) Brakeland's new CEO has instituted a policy of hands-on management with the intention of ensuring that senior members of staff are aware of all company problems.
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Re: The excessive paperwork used to process claims at Brakeland Insurance  [#permalink]

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New post 01 Jan 2018, 22:54
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deucebigalow wrote:
The excessive paperwork used to process claims at Brakeland Insurance Company, not the increase in accident claims involving privately owned cars, is responsible for the declining profits at Brakeland since the appointment of its new CEO. Sterling Auto Insurance Company has seen a similar increase in accidents among its insured vehicles, but while Brakeland's profits have decreased, Sterling's have increased in the same time period.

Which of the following, if true, would most weaken the argument above?

A) Brakeland is experiencing a decrease in corporate insurance claims that have to be paid.

B) Sterling’s customer-service approval ratings have always been higher than Brakeland’s.

C) Both Brakeland and Sterling have experienced an overall rise in claims.

D) Individual policies traditionally account for the majority of Brakeland's profits, while corporate policies have accounted for the majority of Sterling's.

E) Brakeland's new CEO has instituted a policy of hands-on management with the intention of ensuring that senior members of staff are aware of all company problems.
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The answer is D

Premise 1 : The excessive paperwork used to process claims at Brakeland Insurance Company, not the increase in accident claims involving privately owned cars, is responsible for the declining profits at Brakeland since the appointment of its new CEO.

Premise 2 : Sterling Auto Insurance Company has seen a similar increase in accidents among its insured vehicles

Conclusion : Brakeland's profits have decreased, Sterling's have increased in the same time period.

According to the passage the reason cited for the decline in profit of Brakeland is the excessive paperwork .
The argument gives tangential reasoning by giving us an example of Sterling Auto Insurance Company which has seen increase in profits along in spite of the increase in insurance claims.

A is a strengthener
B is irrelevant to the argument as it gives us new information but does not tell us about the profits in anyway
C is just repetition of the information from the passage .
D is our answer as it tells us the different groups of customer the two companies are dealing with it may so happens that The overall increase in individual policy holders are more for Brakeland therefore decrease in profits.
E Out of scope.

Hope it helps :-)
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Re: The excessive paperwork used to process claims at Brakeland Insurance  [#permalink]

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New post 01 Jan 2018, 23:41
there is a question with a similar pattern from kaplan, but that question has a different type.
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The excessive paperwork used to process claims at Brakeland Insurance  [#permalink]

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New post 18 Jan 2018, 13:00
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mikemcgarry


Hi Mike, Im yet not sure how D is correct. How does it matter if one company is dealing in corporate customers, while the other in individual customers. Are we assuming that corporate customers by nature will make more profit to Sterling auto?
I'll be thankful, if you can help me understand.

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Re: The excessive paperwork used to process claims at Brakeland Insurance  [#permalink]

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New post 18 Jan 2018, 13:53
To me - D highlights the comparison error .
Two companies compared work differently hence the basis of comparison is incorrect.

We compare apples to apples not to oranges.
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Re: The excessive paperwork used to process claims at Brakeland Insurance  [#permalink]

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New post 16 Jun 2018, 06:17

Official Explanation Magoosh:


The conclusion that this argument draws is that too much paperwork, rather than an increase in accidents, has caused declining profits at Brakeland. The evidence is based on another company, Sterling. To weaken this argument, we need to find an answer that shows either why an increase in accidents is responsible for declining profits, OR show that Sterling is not a relevant comparison to Brakeland. (D) does the latter. If Sterling is insuring cars for corporations, then most of those cars would be corporately owned, not privately owned—in other words, a situation that would not apply to Brakeland, which primarily insures privately owned car. We don't know how insurance claims on corporately owned cars might differ from those on privately owned cars, but the very fact that it's an entirely different sector of the economy indicates that it's not a particularly good comparison.

Answer choice (A) only tells us about a situation at Brakeland, so it doesn’t question our evidence. It also does not show that the increase in accidents is the cause of the declining profits, so it does not work as a weakener in this case.

(B) compares the customer-service ratings at the two companies, but this is not enough to show that Sterling is not a good comparison to Brakeland. The two companies have been compared in terms of the claims they pay out and the number of cars in accidents they insure, not their customer satisfaction. This is out of the scope of the original question.

(C) follows logically from the evidence given, that both Brakeland and Sterling have insured more vehicles that have been in accidents. Nevertheless, it does not provide a reason that Sterling is not a good comparison to Brakeland, nor does it show that the rise in accidents is responsible for declining Brakeland profits.

Finally, (E) explains a new management initiative at Brakeland, but this is irrelevant to the argument made, that paperwork is responsible for the declining profits. It also does not challenge the evidence comparing Brakeland and Sterling, so it cannot be a strong weakener.
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Re: The excessive paperwork used to process claims at Brakeland Insurance &nbs [#permalink] 16 Jun 2018, 06:17
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