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CAIB 4 Chapter 1 Questions and Answers with Complete Solutions. $12.49   Add to cart

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CAIB 4 Chapter 1 Questions and Answers with Complete Solutions.

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CAIB 4 Chapter 1 Questions and Answers with Complete Solutions.

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  • August 20, 2024
  • 7
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • CAIB
  • CAIB
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Prose1
CAIB 4 Chapter 1 Questions and Answers
with Complete Solutions



Identify any five activities, in addition to planning, that the professional insurance
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bbrokerage will need to capitalize on in order to take advantages of these opportunities. -
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bANS-1. Be innovative b b


2. Be price competitive
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3. Attract and reward ideal employees
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4. Market products to appropriate segments
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5. Focus on profitability
b b b




The key to success and profitability for any insurance brokerage is planning. The best
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plans involve a combination of top-down and bottom-up approaches. Briefly explain the
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top-down approach. - ANS-Management decides on the mission, strategies, and
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objectives for the brokerage and instructs the individual business units to achieve the
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established objectives
b b




Identify an advantage of the top-down approach. - ANS-Management feels firmly in
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bcontrol and in charge of the decision-making.
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Identify a disadvantage of the top-down approach. - ANS-The lack of buy-in by
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bemployees, who had no part in developing the plan. It is "managements" plan, not
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btheirs.

Briefly explain the bottom-up approach. - ANS-The management still provides the
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mission and broad strategies, but leaves the development of objectives, goals and
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activities to the individual business units.
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Identify an advantage of the bottom-up approach. - ANS-The employees will have fully
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bbought-in to "their" plan. b b b




Identify a disadvantage of the bottom-up approach. - ANS-Management may feel that
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bthey lack control, that the planning process is out of their hands and that the employees
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bmay not be accepting of changes made by management if the plan is not what
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bmanagement expected. b

, Briefly explain why a combination of both approaches is the best approach. - ANS-The
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combination of both approaches, with open communication throughout the process, is
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the key to effective and successful planning. The plan should be developed as a joint
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effort with both management and the business units participating, with ample dialogue
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between them at all stages of the planning process.
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Identify the four characteristics of any plan to ensure it is understood and accepted by
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ball concerned. - ANS-1. Simplicity
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2. Practicality
b


3. Severability
b


4. Flexibility
b




Explain what is meant by the simplicity of a plan. - ANS-The plan must be kept simple
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and the outcome should be capable of being communicated in a simple way. It should
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also be capable of being implemented by employees without extensive training while
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they continue to do their day-to-day responsibilities.
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Explain what is meant by the practicality of a plan. - ANS-A plan must be realistic in
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order for it to work. Even a well constructed plan will be doomed to failure if it is
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impossible to implement.
b b b




Explain what is meant by the severability of a plan. - ANS-The finished plan is the
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collection of its parts. These parts must be separate and identifiable so that each
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business unit can see how they apply to their specific area of responsibility to enable
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them to create goals and activities to help achieve the plan.
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Explain what is meant by the flexibility of a plan. - ANS-A good plan must allow for
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modification, as it is not realistic to assume that the environment in which the brokerage
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competes will not change. changing business conditions, loss of key employees, or
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change to insurance regulations can affect implementation. Planners should provide
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flexibility so that mid-plan corrections can be made.
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Strategic plans applying to the brokerage as a whole and extend to a period of 3 to 5
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byears. Identifying the purpose of the strategic plan. - ANS-• Consider alternative
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bcourses of action in response to changing environmental conditions
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• Assess the future impact of the current decision and actions
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• Provide a structure for dealing with business risk and uncertainty
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• Incorporate a process for determining the brokerages purpose, direction and expected
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bresults

To develop a strategic plan management must have a - ANS-Clear picture of the role of
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the brokerage today and the historical factors that created it.
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Management must be fully aware of - ANS-The strengths and weaknesses of the
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brokerage and the opportunities and threats facing it
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