Chapter 3 Flashcards
Key Term: A declaration of core values, principles, and philosophy that a company adheres to and promotes in how it deals with its clients and employees
Mission Statement
Key Term: A description of an organizations aspirations for its own future and sometimes the future of the larger industry or society that is intended to inspire and motivate members of the organization
Vision Statement
Key Term: An approach to strategic planning that assesses external influences to enable a business to become more competitive. The Acronym is made up of the first letters of the four elements: Political, Economic, Social & Technological
PEST analysis
Key Term: An approach to strategic planning that assesses the strengths and weaknesses of an organization and threats that face it. The acronym is made up of the first letters of the four elements: Strengths, Weaknesses, Opportunities, and Treats.
SWOT analysis
Describe FIVE (5) benefits of working on a team.
Employee initiative/empowerment: The team environment fosters creativity and encourages and empowers individuals to take the initiative in preventing issues or solving problems.
Employee ownership: Team members have a sense of ownership, take greater pride in their work, and strive to meet performance objectives.
Team reinforcement: Team members learn skills outside their specialty from each other, enabling them to fill in for each other when necessary.
Internal opportunities: Opportunities to move to other positions within the brokerage are clear to employees.
Teamwork: Rewards can be team focused and promote cooperation among employees.
List FIVE (5) examples of common insurance brokerage employee manuals.
Privacy manual
Human resources manual
Procedure manual
Operations manual
Health and safety manual
What are the steps involved in contingency planning?
Identifying critical assumptions about the future
Establishing the probability of each critical assumption
Ranking critical assumptions in order of probability
Devising an action plan to take advantage of future opportunities or to combat potential threats
Setting triggers to activate the action plan
Specifying alternative response options
Application Question
Alexandra has created a new corporation named Insurance Brokerages, Inc., and set up agreements with several insurers. She has hired a few staff, and they are onboarding Insurance Brokerages’ first clients. Alexandra knows that for the success of her company, it is important that her company have a thorough strategic plan. She carves out the time to begin the planning process that she will need to do to create that plan.
What steps will Alexandra go through in the planning process?
Analyzing external and internal factors
Developing long-term strategies
Composing mission and vision statements
Setting goals and objectives
Developing budgets
Setting policies and procedures
Application Question
Alexandra has created a new corporation named Insurance Brokerages, Inc., and set up agreements with several insurers. She has hired a few staff, and they are onboarding Insurance Brokerages’ first clients. Alexandra knows that for the success of her company, it is important that her company have a thorough strategic plan. She carves out the time to begin the planning process that she will need to do to create that plan.
What factors will she consider during a PEST analysis to determine if her brokerage might wish to compete in a given area?
Current competition: The brokerages currently servicing the local area, including their reputations, business volumes, current insurer contracts, lines of business offered, and any additional competitive advantages they offer
Potential partnerships: The insurers writing in the province or territory and the products they offer; their current appetite for new business (including the class of business), as well as their claims service standards
Current economy: The effect of the current economic climate on business
Target market: The local demographic and how they want to buy and service their insurance needs
Application Question
Alexandra has created a new corporation named Insurance Brokerages, Inc., and set up agreements with several insurers. She has hired a few staff, and they are onboarding Insurance Brokerages’ first clients. Alexandra knows that for the success of her company, it is important that her company have a thorough strategic plan. She carves out the time to begin the planning process that she will need to do to create that plan.
What might she consider concerning how her firm’s strengths, weaknesses, opportunities, and threats can be used in the face of the external and internal opportunities and threats?
Physical features: The physical location of the brokerage, number of offices, equipment, supplies, and general overall appeal to clients
Business channel: Whether a bricks-and-mortar location is more advantageous, or the brokerage should expand its online presence and aggressively market to the new location or target customers
Competition: The competition from other local brokerages, online brokerages, direct writers, and fintechs (digital insurance companies and distribution channels)
Systems and marketing: Omnichannel sales, marketing options, and integration with current broker management systems
Target market: The type of clientele targeted
Organizational structure: The past, present, and future of the brokerage
Employee pool: The staff employed, as well as their talents, skills, education, and experience
Benchmarking: Against available information from other brokerages or internally
Tangible resources: Computer equipment, software, business management system [BMS]) and their current impact on staff efficiency
Target market preferences: Customers’ communication preferences
Market conditions: Current market conditions, including insurer appetite for new business
Current economy: Whether the economy is expanding or contracting: in an expanding economy, there will be new business opportunities, and in a contracting economy, clients want to reduce cost and frequently insurance is seen as an expendable expense
