Chapter 11 - the General Business Environment Flashcards
1
Q
Propensity of consumer to purchase products depends on
A
- power to buy
- inclination to sell
2
Q
Risks to insurer
A
- repetitional risk
- persistency risk
- new business risk
3
Q
Distribution Channels
A
- insurance intermediaries
- tied agents
- direct marketing
- own sales force
4
Q
Insurance intermediaries (3)
A
- select products from most/all of the mkt
- remunerated through commission(infl) OR fee
- CLIENT initiates sale
5
Q
Tied Agents(3)
A
- offers products from one or several insurers
- remunerated by sales & bonuses OR commission
- CLIENT initiates sale
6
Q
Direct Marketing(4)
A
- mailshots = insurer initiates
- telephone selling - insurer/ph initiates
- internet selling
- press advertising = debateable
7
Q
Own Sales Force
A
- ‘ees = ONLY sell employers products
- remunerated = salary, commission OR both
- sales person initiates sale
8
Q
Effects of different distribution channels
A
- demographic profile
- contract design
- contract price
9
Q
Demographic profile(3)
A
- fin sophistication
- correl = mort, morb, withdrawal experience
- level of income
10
Q
Contract Design
A
increased fin sophistication = increased product complexity
11
Q
Contract Pricing
A
- effect need for competitive pricing
- effect demographic assumptions
