Chapter 9 Flashcards
Key Term: Outline of insurable risk put forward to underwriters for approval
Proposal
Key Term : A written or oral agreement given by an insurer to insure a risk, pending the issuance of a formal policy. A binder is deemed to be the policy and must be cancelled in the same manner.
Binder
List FIVE (5) tasks typical of a sales manager’s role.
Hiring: Coordinating with the human resources department to select and hire staff
Producer management: Organizing the producers to effectively and efficiently sell insurance products and other brokerage services to the brokerage’s target market
Salespeople development: Developing the salespeople, including training staff in sales production and motivating them to deliver results
Sales team performance management: Controlling the functions of the sales force in meeting its goals
Resource allocation: Managing the resources made available by the brokerage to promote and support all sales activity in the most efficient manner
Quality control: Controlling the quality of the business that producers present to insurers
Training: Scheduling product information seminars with insurer business development staff to increase product knowledge
In what FIVE (5) areas might a client evaluate a brokerage before doing business with them?
Feedback: Reputation based on recommendations from friends and/or online reviews
Online functionality: Digital presence and the ease of obtaining a quote online
Business size and targets: Size and the types of business handled
Service facilitation: Loss control facilities and in-person and online services provided
Service competence: Service capabilities (such as the immediate return of phone calls, ease of doing business electronically, or the turnaround time within which requests are fulfilled)
List FIVE (5) things insurance salespeople are required to do because of the provisions of PIPEDA.
Provide reason for data collection: Ensure that they advise clients of the purpose for requesting the information
Obtain consent for data collection: Obtain clients’ written consent for the brokerage to use the information for the stated purpose, before the information is received
Use data for collected reason: Ensure that they and other brokerage staff use the information only for the purpose(s) for which they have permission
Secure data: Record the information they collect accurately and ensure that it is held in confidence and under security
Client transparency in regard to their rights: Inform clients of their right to review the information, make a complaint concerning its accuracy or use to an appointed brokerage privacy officer, and request that it be deleted
Application Question
Jason is a new sales manager at a large, urban brokerage. He is trying to understand his team’s overall performance so he can help them be even more successful. Jason has some overall sales figures for his producers, but he wants to looks closely into their costs, productivity, and performance. He begins a search into what information he needs to gather to have a clearer picture of each producer’s specific performance.
What pieces of information should Jason ask for to calculate the cost of acquiring a customer?
Call data: Number and frequency of calls made and/or the number of new prospects called or found; sales can be made only if there are prospects to call on and the producers make the calls
Prospective client headway: Progress made to turn prospects into clients receiving quotations, and quotations into sales; this lets the manager assess how effective producers are
Credit control: Are producers collecting the premiums due to the brokerage as required by the brokerage’s accounts receivable policy?
Call frequency: Frequency of calls per day, week, and month, or other time period the brokerage assigns
Call length: Length of calls
Customer count and value: Number of customers and their value
Application Question
Jason is a new sales manager at a large, urban brokerage. He is trying to understand his team’s overall performance so he can help them be even more successful. Jason has some overall sales figures for his producers, but he wants to looks closely into their costs, productivity, and performance. He begins a search into what information he needs to gather to have a clearer picture of each producer’s specific performance.
What measures can Jason use to quantify his producers’ productivity?
Ratios: Quote ratios, closing ratios, and hit ratios
Policy count: Number of policies the producer handles for both new sales and service
Sales volume: Total sales volume (in dollars) handled by each producer
Target markets: Markets used, which indicates how efficiently the producer places business and how well the brokerage fulfills its volume requirements with its various insurers
Commission maximums: Maximum commission revenue per employee
Accounts receivables: Producer’s impact on accounts receivable
Application Question
Jason is a new sales manager at a large, urban brokerage. He is trying to understand his team’s overall performance so he can help them be even more successful. Jason has some overall sales figures for his producers, but he wants to looks closely into their costs, productivity, and performance. He begins a search into what information he needs to gather to have a clearer picture of each producer’s specific performance.
What sales activity ratios will Jason find useful in his research into his team’s performance?
Percentage of sales to budget: This ratio shows the brokerage’s progress toward the goal.
Sales to quotations: From this, the sales manager can determine how successful producers are at closing sales.
Quotes to leads: This ratio indicates how many leads are being turned into quotation requests (how successful producers are in generating interest from prospective clients). For brokerages that prequalify clients before proceeding with quotations, this ratio will be quotes to qualified prospects.
Percentage margin to sales: This ratio is the percentage of profit (commissions or fees) earned to total revenue generated. The higher the ratio, the more successful the brokerage.
Policy count to customer: This ratio measures the number of policies or products sold to each customer; the more products, the higher the retention ratio over time.
