CPCU 520 Ch. 3 Exam Questions and Answers| New Update with 100% Correct Answers
List the five distinguishing characteristics that drive consumer demand for insurance products
and services. 1. insurance needs
2. knowledge of the insurance markets
3. methods of accessing the insurance market,
4. negotiating ability
5. access to alternative risk financing measures
Summarize how the insurance needs of small businesses can be covered. By a limited
number of commercial policies, such as BOP, a workers comp policy, and commercial auto
policies
Identify the factors that influence an insurer's decision regarding the geographic area it serves.
Based on its size, level of expertise in writing coverage in broader geographic areas, the level
of competition in those areas, and its customer focus. An insurer that chooses a regional area
for operation can more narrowly focus its marketing intelligence to address customers'
insurance needs in the smaller area. In contrast, writing insurance nationally or internationally
requires substantially more marketing intelligence to understand customers and successfully
meet a wider range of insurance needs.
Identify the unique factors that shape the property-casualty insurance marketplace.
Economic forces, regulatory controls, and technology demands that set the parameters
within which insurers must operate. Underwriting cycles, as well as the financial shock of
unanticipated catastrophic losses, further affect it.
Explain why insurers' operations are frequently dependent on investment earnings.
Premiums are held competitively low to attract customers
Identify the purpose of state-based insurance regulations. Stipulate the financial
requirements that insurers must sustain to operate within a state and the marketing conduct to
which insurers must adhere.
, Identify the primary demand for technology in insurer marketing applications Ease of use
focus group a small group of customers or potential customers brought together to provide
opinions about a specific producer, service, need or other issue
predictive analytics statistical and analytical techniques used to develop models that predict
future events or behaviors
market segmentation the process of identifying and dividing the groups within a market that
share needs and characteristics and that will respond similarly to a marketing action
target marketing focusing marketing efforts on a specific group of customers
niche marketing a type of marketing that focuses on specific types of buyers who are a
subset of a larger market
Contrast primary data and secondary data used for insurer market research. Secondary data
are data that have been collected by other parties and are therefore immediately available at
little or no cost. Many research questions can be answered at a minimal expense from
secondary data. Because primary data are collected by the insurer, they are more costly to
acquire; however, these data address issues specific to the market research project
Explain how predictive analytics are used in market research. Most predictive models
generate a score, with the higher score indicating a higher likelihood that the given behavior or
event will occur. Predictive scores are typically used to measure the risk or opportunity
associated with a specific customer or transaction. These evaluations assess the relationship
between many variables to estimate risk or response.
Describe 4 common bases of market segmentation. 1) behavioristic segmentation: the
division of a total consumer market by purchase behavior
2) geographic segmentation: the division of markets by geographic units
List the five distinguishing characteristics that drive consumer demand for insurance products
and services. 1. insurance needs
2. knowledge of the insurance markets
3. methods of accessing the insurance market,
4. negotiating ability
5. access to alternative risk financing measures
Summarize how the insurance needs of small businesses can be covered. By a limited
number of commercial policies, such as BOP, a workers comp policy, and commercial auto
policies
Identify the factors that influence an insurer's decision regarding the geographic area it serves.
Based on its size, level of expertise in writing coverage in broader geographic areas, the level
of competition in those areas, and its customer focus. An insurer that chooses a regional area
for operation can more narrowly focus its marketing intelligence to address customers'
insurance needs in the smaller area. In contrast, writing insurance nationally or internationally
requires substantially more marketing intelligence to understand customers and successfully
meet a wider range of insurance needs.
Identify the unique factors that shape the property-casualty insurance marketplace.
Economic forces, regulatory controls, and technology demands that set the parameters
within which insurers must operate. Underwriting cycles, as well as the financial shock of
unanticipated catastrophic losses, further affect it.
Explain why insurers' operations are frequently dependent on investment earnings.
Premiums are held competitively low to attract customers
Identify the purpose of state-based insurance regulations. Stipulate the financial
requirements that insurers must sustain to operate within a state and the marketing conduct to
which insurers must adhere.
, Identify the primary demand for technology in insurer marketing applications Ease of use
focus group a small group of customers or potential customers brought together to provide
opinions about a specific producer, service, need or other issue
predictive analytics statistical and analytical techniques used to develop models that predict
future events or behaviors
market segmentation the process of identifying and dividing the groups within a market that
share needs and characteristics and that will respond similarly to a marketing action
target marketing focusing marketing efforts on a specific group of customers
niche marketing a type of marketing that focuses on specific types of buyers who are a
subset of a larger market
Contrast primary data and secondary data used for insurer market research. Secondary data
are data that have been collected by other parties and are therefore immediately available at
little or no cost. Many research questions can be answered at a minimal expense from
secondary data. Because primary data are collected by the insurer, they are more costly to
acquire; however, these data address issues specific to the market research project
Explain how predictive analytics are used in market research. Most predictive models
generate a score, with the higher score indicating a higher likelihood that the given behavior or
event will occur. Predictive scores are typically used to measure the risk or opportunity
associated with a specific customer or transaction. These evaluations assess the relationship
between many variables to estimate risk or response.
Describe 4 common bases of market segmentation. 1) behavioristic segmentation: the
division of a total consumer market by purchase behavior
2) geographic segmentation: the division of markets by geographic units
