One of the tools that you would use in the scan of your external environment is profiling. Discuss the three focus areas profiled.
- Competitor Profiling
- Market Profiling
- Client Profiling
Explain ratification using an example.
- Retroactive approval of broker’s unauthorized act
- Insurer has accepted the broker’s act from the beginning
Example: Broker binds coverage on a large hog barn. This exceeds his binding authority but insurer approves coverage effective when the broker bound this unauthorized class of business.
Discuss the three components involved in planning human resources.
- Evaluation of skills of new employees
- Hiring timetable
- Contingency plan
What is delegating and what are the keys to effective delegation.
- Art of accomplishing tasks with involvement of others
- Authority and responsibility
- Communication
You are negotiating with ABC Insurance Company to form a brokerage agreement. What are five major items you want included in this brokerage agreement?
- Authority
- Ownership of expirations
- Billing procedures
- Commission
Explain how strategies, objectives and goals are related.
- Strategies described, in general, what brokerages intend to do to achieve mission
- Objectives translate broad statements in strategies into concrete actions
- Goals express specifically what objectives state generally and which strategies state conceptually
When is a seller of insurance a broker and when is a seller of insurance an agent?
- Agent when representing insurer
- Broker when representing client
Explain the primary and secondary functions of employment interviews.
- Determine if candidate is right for the job
- Allow candidate to determine if job and management is right for them
Identify three reasons managers fail to coach employees.
- Too busy
- Too many employees
- Employees are not motivated to perform better
- Employee performance is adequate
- Don’t know how to coach
Identify five elements to consider when negotiating profit sharing agreements.
- Qualifying amount
- Lines of business included/excluded
- How income is calculated
- How losses are defined & stop loss clause
- Credits for subrogation, premium adjustments and salvage sale
- IBNR
- Growth vs. profitability
- Percentage of underwriting profit paid
- Investment income inclusion
- How profit is calculated
- When payment is made
Owners of your brokerage wish to join an operating affiliation. They want a written report of their options including your opinions.
- Loosely Knit
- General Purpose Groups
- Clusters
- Common Identity Groups
- Services and Support
- Exclusivity
- Fees
- Contractual Agreement
- Financial Strength
Your brokerage is looking for a new insurer to represent. As Marketing Manager, what characteristics would you evaluate.
- Financial Strength
- Marketing Philosophy/Strategy
- Claims Service (history/reputation/ask)
- Underwriting Procedures
- Location
- Policyholder services
Your CEO is developing a strategic plan. She has asked for your guidance. She would like to know what characteristics the plan should possess.
- Flexible
- Serviceable
- Simple
- Practical
While developing marketing strategies, your owner wants to know what options are available. What target marketing strategies would you suggest?
- Undifferentiated
- Differentiated
- Niche
- Custom Marketing
While analyzing new insurer documents, the topic of direct bill is discussed. What is direct bill and what are the disadvantages of direct bill insurance?
- Definition of Direct Bill
- Loss of investment income
- Loss of control of document preparation
- Loss of client contact
- Termination
- Hold harmless
- Privacy Act
- EDI provisions
- Other provisions
You want to attract new insurers to contract with your brokerage. What could your brokerage do to prepare?
- Premises
- Financial information
- Type and mix of business
- Other insurers represented
- Loss experience
- Human resources
- Business Plan
- E&O Claims Record
You have been asked by your Sales Manager to segment your client base using demographics. In what ways would this assist your marketing efforts?
- Age
- Gender
- Life Cycle
- Education
- Occupation
- Ethnic Background
The owner of your brokerage has asked for your written opinion regarding the number of insurers to represent.
- Too many is inefficient
- Too few is dangerous
Advantages of having correct amount: - Proper premium volume to withstand catastrophic losses
- Profit sharing potential
- Strong relations with insurer
The owner of your brokerage heard of something called a ‘strategic’ plan on TV last night. She wants you to explain this to her in a written report.
- Scanning the External Environment
- Analyzing the Internal Environment and Assessing Current Position
- Matching Strengths and Weaknesses to the Opportunities and Threats
- Defining a Corporate Focus
- Developing Strategies
- Developing Objectives
- Setting Goals
The owner has given everyone a gift certificate to Pizza Hut as a year-end bonus. No one seems too impressed. The owner has asked you to explain the motivating function.
- Motivation comes from within
- Usual needs are used to assist in motivation function
- Managers need to recognize what motivates individual employees
While seeing your brokerage, you notice that prospective purchasers only want to view the financial statements to determine value. You want to show them that your brokerage is more than just numbers. What non-financial factors could you discuss with them and how would these reflect your brokerage’s value?
- Geographic representation
- Companies represented
- Types of billings
- Relationships with clients
- Business mix
- Quality of employees
- New business potential
- Loss ratio
- Error and omission losses
You have been asked to send two of your CSRs on a CAIB course. The brokerage owner wants to know what the ‘payback’ will be for the brokerage.
- Service
- Profit Chain
You are trying to convince your boss to upgrade your office’s technology. Aside from operational reasons, what are some arguments you could use?
- Enhance profitability
- Build client relationships
- Improve effectiveness
The new computers have arrived. How would you manage the implementation of the new system?
- Management involvement
- Staff frustrations common
- Contingency plan
- Maximization
