AIB 4 Exam Questions With 100% Correct
C
Answers 2024|2025
What are the two approaches to planning? Explain each - Correct Answer
1) Top Down Planning - Management provides the mission, strategies, and
objectives for the brokerage
2) Bottom Up Planning - Management provides the mission and broad strategies.
Leaves the objectives, goals and activities to business units.
What are the advantages and disadvantages of top down planning? - Correct
Answer Advantages: Management feels in control and in charge of decision making.
Disadvantages: hard to get buy-in from employees
What are the advantages and disadvantages of bottom up planning? - Correct
Answer Advantages: business units have ownership and buy in.
Disadvantages: Management feels less in control, there may be resistance to
changes made to the plan by management.
Why is Top Down planning not suitable for a small organization. - Correct Answer
Stifles innovation, slows decisions, managers need to know too much,
What are the four characteristics of a plan? - Correct Answer 1) Simplicity
2) Practicability
3) Severability
4) Flexibility
Explain Simplicity (2 points) - Correct Answer The plan should be explainable in
simple terms.
The plan should be implemented without extensive training while employees
continue their day to day operations.
,Explain Practicability - Correct Answer The plan must be realistic
Explain severability (2 points) - Correct Answer The parts of a plan must be separate
and identifiable.
Each business unit must see how to apply it to their area
Explain flexibility - Correct Answer A good plan must allow for modification as it is
implemented.
Explain the difference between a strategic plan and an action plan - Correct Answer
Strategic plans are broad and cover 3-5 years.
Action plans give specific activities to support SP. They apply to a particular unit and
cover 1-3 years, typically one year.
How many components of a strategic plan are there? - Correct Answer Seven.
What are the first three components of a strategic plan? - Correct Answer a)
Scanning the external environment.
b) Scanning the Internal Environment
c) Matching strengths and weaknesses to opportunities and threats.
Explain "scanning the external environment" and its two sub categories. - Correct
Answer Scanning the external environment looks at the competitive environment
and attempts to identify opportunities and threats.
They look at the distant environment and near environments.
Explain the distant environment. - Correct Answer Factors that are critical to the
survival of the brokerage, but over which it has no control. Example: Hard and soft
markets. Changes to laws. Technology.
, Explain the near environment. - Correct Answer Factors over which a brokerage
does have control. Example: Clients and prospects, market segment targeted, direct
competitors.
What are the three types of profiling within Near environment scans? - Correct
Answer Competitor, market, and client profiling.
Competitor: Size, financial condition, and location of head office.
Market: Total market, market segments where they compete, and the market portion
that they serve.
Client: Find a clear understanding of the nature and characteristics of a brokerage's
clients.
Explain SWOT and the needed actions given the four scenarios - Correct Answer If
there is a weakness where there is a threat - Immediate Attention
If there is a weakness where there is an opportunity - Resources should be allocated
to capitalize later.
If there is a strength where they is a threat - No action needed
If there is a strength where there is an opportunity - it should be immediately
capitalized on
Recite the vision statement - Correct Answer Protection of assets by protecting what
is near and dear to our clients
Recite the value statement - Correct Answer We seek and encourage innovative
solutions to problems that deliver results for our clients.
Recite the mission statement - Correct Answer To be recognized as a leader in
promoting long term relationships with clients and insurer partners by conducting
ourselves with integrity, professionalism, and utmost good faith.
C
Answers 2024|2025
What are the two approaches to planning? Explain each - Correct Answer
1) Top Down Planning - Management provides the mission, strategies, and
objectives for the brokerage
2) Bottom Up Planning - Management provides the mission and broad strategies.
Leaves the objectives, goals and activities to business units.
What are the advantages and disadvantages of top down planning? - Correct
Answer Advantages: Management feels in control and in charge of decision making.
Disadvantages: hard to get buy-in from employees
What are the advantages and disadvantages of bottom up planning? - Correct
Answer Advantages: business units have ownership and buy in.
Disadvantages: Management feels less in control, there may be resistance to
changes made to the plan by management.
Why is Top Down planning not suitable for a small organization. - Correct Answer
Stifles innovation, slows decisions, managers need to know too much,
What are the four characteristics of a plan? - Correct Answer 1) Simplicity
2) Practicability
3) Severability
4) Flexibility
Explain Simplicity (2 points) - Correct Answer The plan should be explainable in
simple terms.
The plan should be implemented without extensive training while employees
continue their day to day operations.
,Explain Practicability - Correct Answer The plan must be realistic
Explain severability (2 points) - Correct Answer The parts of a plan must be separate
and identifiable.
Each business unit must see how to apply it to their area
Explain flexibility - Correct Answer A good plan must allow for modification as it is
implemented.
Explain the difference between a strategic plan and an action plan - Correct Answer
Strategic plans are broad and cover 3-5 years.
Action plans give specific activities to support SP. They apply to a particular unit and
cover 1-3 years, typically one year.
How many components of a strategic plan are there? - Correct Answer Seven.
What are the first three components of a strategic plan? - Correct Answer a)
Scanning the external environment.
b) Scanning the Internal Environment
c) Matching strengths and weaknesses to opportunities and threats.
Explain "scanning the external environment" and its two sub categories. - Correct
Answer Scanning the external environment looks at the competitive environment
and attempts to identify opportunities and threats.
They look at the distant environment and near environments.
Explain the distant environment. - Correct Answer Factors that are critical to the
survival of the brokerage, but over which it has no control. Example: Hard and soft
markets. Changes to laws. Technology.
, Explain the near environment. - Correct Answer Factors over which a brokerage
does have control. Example: Clients and prospects, market segment targeted, direct
competitors.
What are the three types of profiling within Near environment scans? - Correct
Answer Competitor, market, and client profiling.
Competitor: Size, financial condition, and location of head office.
Market: Total market, market segments where they compete, and the market portion
that they serve.
Client: Find a clear understanding of the nature and characteristics of a brokerage's
clients.
Explain SWOT and the needed actions given the four scenarios - Correct Answer If
there is a weakness where there is a threat - Immediate Attention
If there is a weakness where there is an opportunity - Resources should be allocated
to capitalize later.
If there is a strength where they is a threat - No action needed
If there is a strength where there is an opportunity - it should be immediately
capitalized on
Recite the vision statement - Correct Answer Protection of assets by protecting what
is near and dear to our clients
Recite the value statement - Correct Answer We seek and encourage innovative
solutions to problems that deliver results for our clients.
Recite the mission statement - Correct Answer To be recognized as a leader in
promoting long term relationships with clients and insurer partners by conducting
ourselves with integrity, professionalism, and utmost good faith.
