Studying Policy Retention Rates Using Markov Chains

How does one measure the effect of improved policy retention on such key variables as market share and profitability? This paper will analyze this problem by: using the theory of Markov chains to model policy retention and to determine key values such as steady-state probabilities; using current spreadsheet technology to solve the key matrix equations from Markov chain theory; and applying these results to determine key business variables such as effects on profitability and market share.