CAIB 4 CHAPTER 8 Questions with Correct Solutions
Question:
1. Technology development has had a major impact on the insurance industry. It has
completely transformed the way information is recorded and transmitted between the parties
involved in insurance transactions. Identify five functions that the effective utilization of
technology will allow brokers to realize.
Answer:
1. Improve client service levels
2. Store information safely and convenietly
3. Reduce operating costs
4. Handle large volumnes of work
5. Lesson the likelyhood of human error
Question:
2. Brokerages have traditionaly used technology for operational reasons. Identify three other
areas where brokers have found that technology can be beneficial.
Answer:
1. Enhance profitability
2. Build client relationships
3. Improve effectiveness
Question:
3. Identify, using example, how technology can enhance profitability.
Answer:
An advantage of technology is a reduction in labour Costa as a percentage of total revenue.
This may be the result of reduction in the number of employees required to maintain
production, or by improving the ability of existing brokers to generate revenue.
Question:
4. Identify how technologies can significantly improve the marketing effectiveness of a
brokerage.
Answer:
By creating a faster response to the client. Modern database technology enable brokerages to
identify specifically who is buying insurance from them and who their most effective brokers
are.
, Question:
5. Identify three ways modern database technology can assist a brokerage in it's marketing
efforts.
Answer:
1. It enables brokers to target the most appropriate market segments and to create
relationships with clients.
2. Enables them to enhance the relationships with existing clients by providing them with the
information to predict future insurance needs.
3. Marketing efforts can be very focused and refined, resulting in a higher return on
investment of both time and marketing dollars.
Question:
6. Brokerage office procedures are affected in several ways by technology, and technology
needs to work for the brokerage and not the other way around. Identify three ways or areas
where technology can improve effectiveness in a brokerage.
Answer:
1. Reduces administrative tasks, and frees producers to do what they do best: sell insurance
and service clients
2. Technology helps standardize office procedures such as abeyance processes and file
documentation.
3. Follow-up activities are better coordinated and the potential for errors and omissions will
be reduced.
Question:
7. Brokerages must make their technology decisions based on their strategic plan, and must
define their business processes, functions and technology requirements in clear terms, It is
important for a brokerage to understand its current and future business needs when choosing
hardware and software, as it can rapidly become obsolete as technological innovations
progresses. Identify seven areas an effective Broker Management System should integrate.
CATCAPS
Answer:
1. Client file database
2. Accounting
3. Training
4. Communication
5. Administration
6. Product management
7. Service and support
Question:
1. Technology development has had a major impact on the insurance industry. It has
completely transformed the way information is recorded and transmitted between the parties
involved in insurance transactions. Identify five functions that the effective utilization of
technology will allow brokers to realize.
Answer:
1. Improve client service levels
2. Store information safely and convenietly
3. Reduce operating costs
4. Handle large volumnes of work
5. Lesson the likelyhood of human error
Question:
2. Brokerages have traditionaly used technology for operational reasons. Identify three other
areas where brokers have found that technology can be beneficial.
Answer:
1. Enhance profitability
2. Build client relationships
3. Improve effectiveness
Question:
3. Identify, using example, how technology can enhance profitability.
Answer:
An advantage of technology is a reduction in labour Costa as a percentage of total revenue.
This may be the result of reduction in the number of employees required to maintain
production, or by improving the ability of existing brokers to generate revenue.
Question:
4. Identify how technologies can significantly improve the marketing effectiveness of a
brokerage.
Answer:
By creating a faster response to the client. Modern database technology enable brokerages to
identify specifically who is buying insurance from them and who their most effective brokers
are.
, Question:
5. Identify three ways modern database technology can assist a brokerage in it's marketing
efforts.
Answer:
1. It enables brokers to target the most appropriate market segments and to create
relationships with clients.
2. Enables them to enhance the relationships with existing clients by providing them with the
information to predict future insurance needs.
3. Marketing efforts can be very focused and refined, resulting in a higher return on
investment of both time and marketing dollars.
Question:
6. Brokerage office procedures are affected in several ways by technology, and technology
needs to work for the brokerage and not the other way around. Identify three ways or areas
where technology can improve effectiveness in a brokerage.
Answer:
1. Reduces administrative tasks, and frees producers to do what they do best: sell insurance
and service clients
2. Technology helps standardize office procedures such as abeyance processes and file
documentation.
3. Follow-up activities are better coordinated and the potential for errors and omissions will
be reduced.
Question:
7. Brokerages must make their technology decisions based on their strategic plan, and must
define their business processes, functions and technology requirements in clear terms, It is
important for a brokerage to understand its current and future business needs when choosing
hardware and software, as it can rapidly become obsolete as technological innovations
progresses. Identify seven areas an effective Broker Management System should integrate.
CATCAPS
Answer:
1. Client file database
2. Accounting
3. Training
4. Communication
5. Administration
6. Product management
7. Service and support
