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CIC Agency Management Questions Solved 100 Correct
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CIC - Agency Management Questions Solved100% Correct
1). Budget considerations for growing an agency and doing a needs assessment
Ans: -the specific talents and skills employees require
-an awareness of gaps, deficiencies, and surpluses within and across departments
-a determination of how many employees the agency can afford to hire
-the best time for employees to join the agency
2). An agency uses its value statement to accomplish several goals
Ans: 1. Communicate the agency's core principles to shape its direction and
organizational goals
2. Focus on aspirations and behavioral issues that matter most to the agency's
leadership
3. Define the standards of conduct and expectations for all agency members
4. Communicate these statements orally, written, and electronic form
3). Value statement answers the questions
Ans: Who we are?
What we are?
How we do it?
4). An example of a value statement
Ans: The smith Agency values helping local businesses succeed
5). An agency's vision statement should
Ans: 1. Communicate a clear picture of what an agency is trying to achieve
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, 2. Identifies characteristics that:
-reflect the long-range goals of the agency's policyholders
-project the view of what the agency aspires to be
-guide the agency's strategic development
6). An agency's vision statement answers
Ans: Where do we want to go?
7). An example of a vision statement
Ans: The vision of the Smith Agency is to be a fully employee-owned agency that is
recognized as the premier commercial lines agency in the region
8). An agency's mission statement should
Ans: -provide a clear statement of an agency's purpose and focus
-Identify characteristics that are broadly stated in terms of service, income, and profit
-establish clear growth goals serving its key stakeholders, clients, and employees
9). An example of a mission statement
Ans: ABC Agency will provide quality personal and commercial insurance products to
the clients located within our trade area to help them achieve their financial security
goals
10). Several considerations that contribute to establishing an agency's goals
Ans: -Target market niches
-Agency personnel and productivity
-Market territory
-Multiple locations
-Marketing and Sales
11). Long-range planning
Ans: occurs over 3 to 5 years
-establishes purpose, continuity, and direction
-focuses on broad goals that will remain relevant years later
-provides a broad picture of where an agency is headed
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, 12). Short-range planning
Ans: Usually extends over a 12 month period
-more specific and provides details that fit within the framework of the long-term plan
-Involves the production of detailed action plans that organize and prioritize action steps
-Communicate roles and responsibilities
-offers guidance
-provides an agency's daily/weekly/monthly action agendas
13). S-m-a-r-t
Ans: Specific - Measurable - Attainable - Realistic - Timely
14). An agency's 5 growth stages
Ans: 1. Start-Up
2. Development & Growth
3. Success
4. Expansion
5. Maturity
15). Start-up companies
Ans: owner or management team handles everything
-the agency is only beginning to establish its client base, production, and service is
unstable
16). Development & growth
Ans: -an increased number of clients/account
-make efforts to balance revenue and expenses
-owner/management team remains involved in daily operations
17). Success
Ans: -agency is profitable and follows well-executed procedures
-owner/management team delegates some sales and service activities
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, 18). Expansion
Ans: -an agency grows rapidly and targets new marketing territories
19). Maturity
Ans: -agency is fully developed and uses sophisticated systems
-emphasis on collaboration and building professional integrity
-CEO/management team focuses on strategic goals, planning, human resource
development, and support systems
20). Factors that asses an agency's financial health
Ans: 1. Profitability
2. Accounts Receivable - able to collect payments in a timely manner
3. Retention Ratio
4. Average commissions - Producer compensation structure - who owns the book of
business
5. Competencies of personnel - company markets
6. Brand - positive or negative image in the community
21). Tools to measure agency financial health
Ans: 1. Budget
2. Income Statement
3. Balance Sheet
22). Budget allows
Ans: an owner/management team to compare monthly results to projected results
23). An income statement shows
Ans: an agency's revenues and expenses over a period of time and can depict activity
over a month, quarter, or year
24). Four income sources for an agency are:
Ans: 1. Commissions
2. Fee Income
3. Interest/Investment income - interest on agency investments & premium trust account
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