CAIB 4 CERTIFICATION EVALUATION
QUESTIONS AND SOLUTIONS STUDY GUIDE
●● The key to success and profitability for any insurance brokerage is
planning. The best plans involve a combination of top-down and bottom-
up approaches. Briefly explain the top-down approach.
Answer: Management decides on the mission, strategies, and objectives
for the brokerage and instructs the individual business units to achieve
the established objectives
●● Identify an advantage of the top-down approach.
Answer: Management feels firmly in control and in charge of the
decision-making.
●● Identify a disadvantage of the top-down approach.
Answer: The lack of buy-in by employees, who had no part in
developing the plan. It is "managements" plan, not theirs.
●● Briefly explain the bottom-up approach.
Answer: The management still provides the mission and broad
strategies, but leaves the development of objectives, goals and activities
to the individual business units.
●● Identify an advantage of the bottom-up approach.
, Answer: The employees will have fully bought-in to "their" plan.
●● Identify a disadvantage of the bottom-up approach.
Answer: Management may feel that they lack control, that the planning
process is out of their hands and that the employees may not be
accepting of changes made by management if the plan is not what
management expected.
●● Briefly explain why a combination of both approaches is the best
approach.
Answer: The combination of both approaches, with open communication
throughout the process, is the key to effective and successful planning.
The plan should be developed as a joint effort with both management
and the business units participating, with ample dialogue between them
at all stages of the planning process.
●● Identify the four characteristics of any plan to ensure it is understood
and accepted by all concerned.
Answer: 1. Simplicity
2. Practicality
3. Severability
4. Flexibility
●● Explain what is meant by the simplicity of a plan.
QUESTIONS AND SOLUTIONS STUDY GUIDE
●● The key to success and profitability for any insurance brokerage is
planning. The best plans involve a combination of top-down and bottom-
up approaches. Briefly explain the top-down approach.
Answer: Management decides on the mission, strategies, and objectives
for the brokerage and instructs the individual business units to achieve
the established objectives
●● Identify an advantage of the top-down approach.
Answer: Management feels firmly in control and in charge of the
decision-making.
●● Identify a disadvantage of the top-down approach.
Answer: The lack of buy-in by employees, who had no part in
developing the plan. It is "managements" plan, not theirs.
●● Briefly explain the bottom-up approach.
Answer: The management still provides the mission and broad
strategies, but leaves the development of objectives, goals and activities
to the individual business units.
●● Identify an advantage of the bottom-up approach.
, Answer: The employees will have fully bought-in to "their" plan.
●● Identify a disadvantage of the bottom-up approach.
Answer: Management may feel that they lack control, that the planning
process is out of their hands and that the employees may not be
accepting of changes made by management if the plan is not what
management expected.
●● Briefly explain why a combination of both approaches is the best
approach.
Answer: The combination of both approaches, with open communication
throughout the process, is the key to effective and successful planning.
The plan should be developed as a joint effort with both management
and the business units participating, with ample dialogue between them
at all stages of the planning process.
●● Identify the four characteristics of any plan to ensure it is understood
and accepted by all concerned.
Answer: 1. Simplicity
2. Practicality
3. Severability
4. Flexibility
●● Explain what is meant by the simplicity of a plan.
