CPCU 520- Meeting Challenges Across Insurance Operations UPDATED
ACTUAL Questions And Correct Answers
C
Terms in this set (202)
Cost leadership A business-level strategy through which a company seeks cost efficiencies in all
operational areas.
Underwriting The process of selecting insureds, pricing coverage, determining insurance policy
terms and conditions, and then monitoring the underwriting decisions made.
For underwriting to achieve its purpose, Insurers must minimize the effects of
adverse selection on the book of business
Loss ratio A ratio that measures losses and loss adjustment expenses against earned
premiums and that reflects the percentage of premiums being consumed by
losses.
supply chain a network of connections between each of the entities (namely organizations) that
are used throughout the process of bringing a product or service to market—from
suppliers to end users. A supply chain model is used for identifying how reliant a
business is on any point in the supply chain and any potential weak links that
could disrupt business.
value chain model is used for analyzing the input activities a single company performs to create
marketable outputs for customers and for identifying ways to maximize its
competitive advantage.
Primary activities- Inbound Logistics, Operations, Outbound Logistics, Marketing
and Sales, and Service
Support activities- Infrastructure, Human Resources, Technology, and
Procurement
three primary functions exist within the structure of a marketing and distribution- Marketing and distribution involves determining what
typical insurer products customers want and need, advertising those products (communicating
their value to customers), and delivering them to customers.
underwriting- The goal of the underwriting function is to help the insurer write
and maintain profitable business. This requires selecting insureds whose covered
losses are not likely to exceed the amount of losses the insurer anticipated when it
priced the insureds' coverage.
claims- An insurance policy is a promise by the insurer to make a payment to, or
on behalf of, the insured if an event covered under the policy occurs. The purpose
of the claims function is to fulfill this promise.
,Support Activities 1) Risk control- can help marketing and sales by proving to applicants and
insureds that the insurer understands their business operations and associated
hazards and is prepared to help them protect their interests
2) Premium auditing
3) Actuarial
4) Reinsurance- Factors affecting a primary insurer's reinsurance limit selection are
most accurately listed as Maximum policy limit, extracontractual obligations, and
loss adjustment expenses
5) IT- a rapidly growing value chain support function that provides the backbone
that supports an insurer's communications, operations, marketing, underwriting,
investing, and claims handling
6) Investments- Insurers' operations frequently depend on investment earnings
because premiums are held competitively low to attract customers. As a result,
investment earnings are frequently relied on to off set high losses and rising costs.
7) Accounting and finance
8) Customer service
9) Legal and compliance
10) Human resources (HR)
11) SIU
, Marketing is an insurer's information portal to customers. Gather information about customers
Through this portal, which includes marketing research
and communication, insurers: Make decisions about segments of customers whose needs they can address and
what products to sell them
Disseminate information to existing and prospective customers
What are six of the methods that producers use to locate prospective clients:
1) Referrals from present clients
2) Referrals from strategic partners, such as financial institutions and real estate
brokers
3) Advertising
4) Interactive websites, social media, and mobile marketing
5) Telephone solicitations
6) Cold canvassing
Premium audit Methodical examination of a policyholder's operations, records, and books of
account to determine the actual exposure units and premium for insurance
coverages already provided.
Robin works for Taunton Insurance Company. She works directly with insureds and
understands their operations. Her responsibilities include accurately classifying an
insured's loss exposures and determining the exposure units on which the
premium is based. Robin works as A premium auditor
ACTUAL Questions And Correct Answers
C
Terms in this set (202)
Cost leadership A business-level strategy through which a company seeks cost efficiencies in all
operational areas.
Underwriting The process of selecting insureds, pricing coverage, determining insurance policy
terms and conditions, and then monitoring the underwriting decisions made.
For underwriting to achieve its purpose, Insurers must minimize the effects of
adverse selection on the book of business
Loss ratio A ratio that measures losses and loss adjustment expenses against earned
premiums and that reflects the percentage of premiums being consumed by
losses.
supply chain a network of connections between each of the entities (namely organizations) that
are used throughout the process of bringing a product or service to market—from
suppliers to end users. A supply chain model is used for identifying how reliant a
business is on any point in the supply chain and any potential weak links that
could disrupt business.
value chain model is used for analyzing the input activities a single company performs to create
marketable outputs for customers and for identifying ways to maximize its
competitive advantage.
Primary activities- Inbound Logistics, Operations, Outbound Logistics, Marketing
and Sales, and Service
Support activities- Infrastructure, Human Resources, Technology, and
Procurement
three primary functions exist within the structure of a marketing and distribution- Marketing and distribution involves determining what
typical insurer products customers want and need, advertising those products (communicating
their value to customers), and delivering them to customers.
underwriting- The goal of the underwriting function is to help the insurer write
and maintain profitable business. This requires selecting insureds whose covered
losses are not likely to exceed the amount of losses the insurer anticipated when it
priced the insureds' coverage.
claims- An insurance policy is a promise by the insurer to make a payment to, or
on behalf of, the insured if an event covered under the policy occurs. The purpose
of the claims function is to fulfill this promise.
,Support Activities 1) Risk control- can help marketing and sales by proving to applicants and
insureds that the insurer understands their business operations and associated
hazards and is prepared to help them protect their interests
2) Premium auditing
3) Actuarial
4) Reinsurance- Factors affecting a primary insurer's reinsurance limit selection are
most accurately listed as Maximum policy limit, extracontractual obligations, and
loss adjustment expenses
5) IT- a rapidly growing value chain support function that provides the backbone
that supports an insurer's communications, operations, marketing, underwriting,
investing, and claims handling
6) Investments- Insurers' operations frequently depend on investment earnings
because premiums are held competitively low to attract customers. As a result,
investment earnings are frequently relied on to off set high losses and rising costs.
7) Accounting and finance
8) Customer service
9) Legal and compliance
10) Human resources (HR)
11) SIU
, Marketing is an insurer's information portal to customers. Gather information about customers
Through this portal, which includes marketing research
and communication, insurers: Make decisions about segments of customers whose needs they can address and
what products to sell them
Disseminate information to existing and prospective customers
What are six of the methods that producers use to locate prospective clients:
1) Referrals from present clients
2) Referrals from strategic partners, such as financial institutions and real estate
brokers
3) Advertising
4) Interactive websites, social media, and mobile marketing
5) Telephone solicitations
6) Cold canvassing
Premium audit Methodical examination of a policyholder's operations, records, and books of
account to determine the actual exposure units and premium for insurance
coverages already provided.
Robin works for Taunton Insurance Company. She works directly with insureds and
understands their operations. Her responsibilities include accurately classifying an
insured's loss exposures and determining the exposure units on which the
premium is based. Robin works as A premium auditor
