Chapter 4

Question 1

What are the two main types of distribution for packaged policies?

Answer 1

Direct and indirect

Question 2

What is a direct channel of distribution?

Answer 2

Where employees of the insurance company sell the products or direct marketing techniques are used to promote the sale.

Question 3

What is an indirect channel of distribution?

Answer 3

Arranged by a TP such as an insurance broker.

Question 4

What are the main reasons that commercial packaged policies are well suited to being sold directly?

Answer 4

They packages are straightforward
The requirements can be matched to standard products
The underwriting is simple

Question 5

Why would the insured use a indirect channel?

Answer 5

Many small buisness owners chose this because they either dont have:
time
expertise
knowledge
to use a self-serve model of purchasing insurance

Question 6

What does EDI stand for?

Answer 6

Electronic Data Interchange

Question 7

Define EDI?

Answer 7

An interface between intermediaries and insurers that provides pricing information and may be used to effect renewals and alterations - such as E-Trade

Question 8

How does the EDI beenfit intermediaries?

Answer 8

Enables them to offer the same serve level as direct insurers.

Question 9

How does the EDI beenfit intermediaries?

Answer 9

Enables them to offer the same serve level as direct insurers.

Question 10

How do banks/building society’s position themselves within the insurance market?

Answer 10

Normally as an agent with links to specific insurers or intermediaries.

Question 11

Who to customers now search for insurance?

Answer 11

Call centers
the internet
apps
social media

Question 12

What is the technical term for a comparison site?

Answer 12

An aggregator

Question 13

Intermediaries and insurers use brochure sites to interact with customers. What are they?

Answer 13

Non-interactive online version of insurers marketing material.
Customers provide contact details and are called back
or customers are encouraged to call the provider directly

Question 14

Intermediaries and insurers use webform sites to interact with customers. What are they?

Answer 14

Its the annoying sites where you give all your info thinking you will get an instant quote and then it flashes up saying an adviser will call you soon with a quote.

Question 15

Intermediaries and insurers use interactive sites to interact with customers. What are they?

Answer 15

Quotation online instantly

Question 16

Intermediaries and insurers use full service sites to interact with customers. What are they?

Answer 16

Quotation online instantly and you can buy it online.

Question 17

What is advertising?

Answer 17

Paying for the promotion of your products and services

Question 18

What is an example of publisity?

Answer 18

Article in the business pages of newspapers

Question 19

How does focused products attract new buisness?

Answer 19

Focusing on a specific trade, will offer a product which covers the trades specific needs and therefore attracts policyholders within that trade.

Question 20

Why is there such an emphasis on high customer service?

Answer 20

Satisfied customer are more likely to renew or increase the cover. It is also free advertising through word of mouth.

Question 21

What is an SLA?

Answer 21

Service Level Agreement

Question 22

What is often included in SLAs?

Answer 22

Response times, service provided in the event of a claim, what occurs if an appointment is terminated ect

Question 23

What is a products lifecycle?

Answer 23

The time from introducing the product to the market place, through growth and maturity until sales start to decline and the product looses its appeal and is overtakes by alternatives.

Question 24

How often does an insurer anticipate it will need to redesign and relaunch a product to retain a market share?

Answer 24

Every 12-18 months

Question 25

Authorised firms must take reasonable steps to ensure that all financial promotions (such as product brochures, advertising and web sites) are what?

Answer 25

Fair, Clear and not misleading

Question 26

If a financial promotion is not fair clear and not misleading it will be withdrawn, what else will happen?

Answer 26

Any customer potentially affected must be notified

Question 27

If a financial promotion makes a claim about the competitiveness of its prices what must it also fo?

Answer 27

Reflect the result reasonably expected by most customers who respond to it.
State prominently the basis for the claimed benefit and any limitations.