Chapter 5 - Methods of Sale in South Africa

Question 1

Key marketing channels used: (4)

Answer 1

1. Brokers (independent and corporate)
2. Company agents (commissioned and salaried)
3. Direct response marketing (media ass, direct mail, tele sales)
4. Bancassurance (sold to bank customers)

Question 2

Types of commission paid: (3)

Answer 2

1. Upfront, can be paid on single and recurring policies
2. As-and-when, only relevant for recurring prm policies
3. Trail commission, can be paid on recurring or single prm policies

Question 3

How could commission levels lead to inappropriate advice: (3)

Answer 3

1. Recommend policies with higher benefits, which will have higher prm, higher comm
2. Recommend policies with longer term than required by PH (longer term = higher comm)
3. Recommend less suitable product types in order to maximise comm