Chapter 2 - Questions

Question 1

Provisions of products and services

Answer 1

• There are a lot of general insurance which allows the exchange of a potential loss for the financial uncertainty of paying a premium and the potential of a claim payout
• Where risk is transferred to an insurance company in exchange for a premium
• This can be done through brokers, it is argued that these provisions and services are the primary role of a broker

Question 2

Identification of a clients needs

Answer 2

• Brokers have an important role in helping clients understand their insurance requirements;
  They can do this through:
  1. Identifying and clarifying requirements (demands & needs)
  2. Identifying an insurance product/service that best matches these requirements
  3. Providing information on what products are available
  4. Explaining the result as to why the client purchased that product in terms they can understand

Question 3

How brokers establish clients needs

Answer 3

• This requires the completion of a proposal form, they follow an established format with different questionnaires
• The questionnaires forms a basis for the document which outlines what the client demands and what they need

Question 4

The process of providing insurance products

Answer 4

There are 6 steps:

1. Establish what the client wants (e.g. motor, home, travel)
2. Complete a proposal form appropriate to the class of business
3. Confirm the clients demands and needs and provide them with a copy
4. Source the appropriate product having considered the full range of the clients demands and needs
5. Recommend the product to the client ensuring they have all the information they need and explain how it has met those needs
6. Formally arrange the cover and bring the insurer and client into contact.