Assignment 7 - Insurance Marketing and Distribution

Which one of the following statements is true?

A marketing plan identifies the product or service to be promoted and the customers to be targeted

Which one of the following statements is true regarding traditional marketing systems for insurance?

A principal characteristic that distinguishes one traditional marketing system from another is the ownership of policy expirations

A marketing plan for a typical insurance product includes

A situational (SWOT) analysis of the current marketplace

Independent agent networks are known as

Agent clusters

An insurer that targets large middle-market and national accounts would most likely use which one of the following distribution systems?

Broker

Which one of the following distribution channels is also an efficient way to handle claim reporting and billing inquiries?

Call centers

The principal method of determining a prospect's insurance needs is through

Completing a risk management review for the prospect

The needs and characteristics of customers—both existing and those in target markets—are key factors in an insurer's selection of distribution systems and channels because

Customer satisfaction drives their purchase decisions

Juan received a phone call from an angry policyholder. The insured received a bill as a result of a workers compensation premium audit. The individual does not understand why premium has increased when his total payroll is lower than originally projected. Juan advises the insured that he will contact the auditor, review the audit, and call back with an explanation. Which one of the following producer functions is Juan performing?

Customer service

Which one of the following is NOT a method of transferring premiums to the insurer in the agency bill process?

Direct bill basis

Which one of the following premium collection methods is used in the majority of personal insurance sales?

Direct bill process

Insurance Company D (ICD) has traditionally used regional brokers to market and produce its insurance products. The management team at ICD has decided it wants to launch a new specialized product. The marketing plan includes ICD's desire to control the targeted number of monthly applications as well as the methods that will be used to advertise and campaign to achieve the desired results. Which one of the following distribution systems will best allow ICD the desired control?

Direct writer

Bill is an insurance producer for ABC Insurance Company (ABC). He represents only ABC when marketing insurance products. ABC compensates Bill primarily through salary, and he has no ownership rights to policy expirations. Bill is a producer in the

Direct writer marketing system

Which marketing system would be most appropriate for an insurer that wants some control over its agents but does not want the responsibility of the administrative functions associated with employees?

Exclusive agency

Omicron Manufacturing has approached Delta Insurance Brokerage to develop and implement a voluntary insurance program for life, health, and disability insurance for Omicron's employees. Delta puts together a program in which employees receive the coverage at discounted rates, and premiums are deducted from the employees' paychecks. Omicron and Delta are using which one of the following types of group marketing to offer this program?

Franchise marketing

Insurance Company (IC) is updating its marketing plan for the coming year. An important part of the plan is deciding on the distribution system and channel to use. The management team is proposing a combination of the distribution systems and channels. A consideration unique to combining distribution systems and channels is

If customers will receive the same message about products and services no matter which system they choose

Given the complexity of commercial insurance, which one of the following is best suited for its distribution?

Independent agencies

Which one of the following types of agent is usually paid the same commission rate for new business and renewals?

Independent agent

William has decided to start a small architecture business. He has rented office space, purchased furnishings, and hired four employees. William knows that he needs to purchase insurance before he can open for business, but is not sure what coverages and limits to purchase. Which one of the following insurance distribution systems is most appropriate for William?

Independent agent

Gulford Insurance Company (Gulford) is a direct writer of commercial insurance in Pennsylvania. The management team is frustrated by the continued lack of success in the more rural western part of the state. It is difficult to penetrate the market without a local presence, but the cost of assigning agents to this territory is not justified by the returns. Which one of the following distribution systems would best allow Gulford the local presence in a cost-effective manner?

Independent agents

The main insurance distribution systems include all of the following, EXCEPT

Internet sales system

Which one of the following statements is true?

It is important when combining distribution systems and channels for an insurer to provide consistent messages about its products and services

Which one of the following insurer customer groups may have a risk manager to assist with coverage decisions, typically use brokers to access the insurance markets, and may be targeted by small (local), regional, or national brokers?

Middle markets

Daniel is an insurance underwriter with over twenty years of experience. He has worked with reinsurers, surplus lines brokers, retention plans, and various captive arrangements. With which one of the following customer groups is Daniel most likely working?

National accounts

Which one of the following insurance consumer groups would have the most risk financing alternatives available to them?

National accounts

Though marketing plans are varied, they all serve the same fundamental purpose of

Providing the "roadmap" necessary to profitably and effectively acquaint sellers with potential buyers

Which one of the following methods of prospecting is more likely to be used by an experienced producer than a new insurance producer?

Referrals from present clients

The most difficult time for an insurer to change distribution systems is when

Renewing an existing book of business

A commercial insurer has historically targeted small businesses. It is considering expanding its market to middle market organizations. To succeed, the insurer will need to develop a level of expertise in which one of the following areas?

Risk financing alternatives

Donna is an insurance producer. She makes an appointment with a potential policyholder to review the prospect's loss exposures. She asks the prospect to complete a questionnaire to assist her in this effort. Donna is conducting a

Risk management review

Which one of the following statements about insurance distribution systems and channels is true?

Surplus lines brokers can place coverage that is not available through standard market insurers

Which of the following techniques do insurers use to more closely define a group of customers within a market segment?

Target marketing

Which one of the following statements is correct with respect to insurers' use of the Internet and insurance portals?

The Internet provides lead-generation and cross-selling opportunities for all products

When selecting a distribution channel, which one of the following is an important consideration with regard to customers' needs and characteristics?

The ease of accessibility within the channel

Which one of the following statements is true concerning the use of alternative distribution channels to sell insurance?

The increasing use of multiple distribution channels has been driven by technology and customer preferences

An agency bill process in which the producer is usually not required to pay the insurer until the premium is collected from the policyholder is known as

The item basis

Which one of the following statements is correct with respect to selecting a distribution channel?

The types of insurance products and services to be delivered by the insurer must fit the marketing channel selected

Which one of the following statements is correct with respect to marketing plans?

They identify target customers, and the resources and strategies to be used to create, price, promote, and sell the product

Predictive scores are typically used

To measure the risk or opportunity associated with a specific customer or transaction

Which one of the following often leads to insurer insolvency, withdrawal from certain geographic markets, and reinsurance shortages?

Unanticipated catastrophic losses

Anna is doing market research on the food industry. She has segmented the market into wholesale and retail operations, and further segmented the wholesale market into meats, fruit and vegetables, dairy, bakery, and non-perishables. Which one of the following would be considered the best example of a niche market?

Wholesale bakery