Questions from study text - Chapter One Flashcards
What is the difference between an independent intermediary and an intermediary?
An independent intermediary conducts insurance mediation without being contractually tied to any other organisation. Insurance brokers are independent intermediaries. Intermediaries who are not independent are contractually tied to one or more organisations.
In common law, who is an agent?
An agent is anyone who acts on behalf of another. An agent is authorised by the ‘principal’ to bring them into a contractual relationship with another.
State four reasons why an insured might buy insurance from an insurance broker
- Convenience
- Expert Knowledge
- Independent Quotation
- Complexity of Product
- Assistance with claims
- Existing relationship or connected business
- Other services offered
State four benefits for an insurer of using insurance brokers
- Convenience
- Technical Expertise
- Cost Benefits
- Peace of Mind
State four types of insurance broker
- Global Firms
- UK-only based
- Consolidators
- Niche sector
- Wholesale
- Reinsurance
- Online
- Lloyd’s
State four typical methods of segmentation
- By class
- By trade
- By client size
- By premium size
How are the four main services offered by insurance brokers classified?
Traditional broking services, risk management, added value services, and services to insurers.
What are the traditional broking services?
- Reviewing client needs
- Selecting insurers
- Negotiating terms with insurers
- Providing advice
- Negotiate renewals
- Advising and assisting clients with claims
- Design and operation of insurance programmes
State five added value services a broker may offer
- Property surveys
- Business continuity plans
- Business interruption reviews
- Health and safety
- Liability surveys
- Motor fleet risk management
- Environment risk surveys
- Post-loss control surveys
- Disaster recovery surveys
State the three classes of business handled by insurance brokers
Personal lines, commercial and specialties
Why are some classes of business more suited to insurance brokers?
Complexity of risk, size and location of risk and availability of cover mean that some risks are more suited to insurance brokers
Identify four roles within an insurance broking organisation
- Client service
- New business
- Broking
- Claims
- Management
- Compliance
- Product development
- Back office functions
