Advanced Diploma in Insurance

THE CHARTERED INSURANCE INSTITUTE 945 Advanced Diploma in Insurance Unit 945 – Marketing insurance products and services October 2011 examination In...
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THE CHARTERED INSURANCE INSTITUTE

945 Advanced Diploma in Insurance Unit 945 – Marketing insurance products and services October 2011 examination

Instructions 

Three hours are allowed for this paper.



Do not begin writing until the invigilator instructs you to.



Read the instructions on page 3 carefully before answering any questions.



Provide the information requested on the answer book and form B.



You are allowed to write on the inside pages of this question paper, but you must NOT write your name, candidate number, PIN or any other identification anywhere on this question paper.



The answer book and this question paper must both be handed in personally by you to the invigilator before you leave the examination room. Failure to comply with this regulation will result in your paper not being marked and you may be prevented from entering this examination in the future.

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© The Chartered Insurance Institute 2011 1912

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Unit 945 – Marketing insurance products and services Instructions to candidates Read the instructions below before answering any questions 

Three hours are allowed for this paper which carries a total of 160 marks, as follows: Part I Part II

1 compulsory question (case study) 2 questions selected from 3 (scenarios)

80 marks 80 marks



You should answer the question in Part I, and two out of the three questions in Part II.



You are advised to spend no more than 90 minutes on Part I and 45 minutes on each question selected in Part II.



It is recommended that you spend 15 minutes reading and planning your answer to the case study and 75 minutes answering it, and that you spend 10 minutes reading and planning your answer to each scenario and 35 minutes answering it.



A case study tests extensively across syllabus learning outcomes, whilst a scenario will be more focused on specific learning outcomes.



Read carefully all questions and information provided before starting to answer. Your answer will be marked strictly in accordance with the question set.



You may find it helpful in some places to make rough notes in the answer booklet. If you do this, you should cross through these notes before you hand in the booklet.



Answer each question on a new page. If a question has more than one part, leave six lines blank after each part.

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PART I Case study. This question is worth 80 marks. To gain maximum marks you should include relevant examples and further reading in your answer.

1.

Case study You are a member of the marketing team of Perren Insurance Company plc (Perren), which is a medium-sized UK insurer with an expected gross premium income of £1.8 billion in 2011 which will represent a reduction on the 2010 figure. Perren insures a wide range of personal and commercial non-life policies through insurance brokers and, to a limited extent, on a direct dealing basis. Perren has made acceptable underwriting profits in recent years; however, there is evidence of a decrease in customer numbers across all products. The company has a passion to achieve the best performance standards in the market and invests heavily in staff selection, training and development. This enables Perren to stand out from its competitors by offering an excellent quality service to all its customers and it receives few complaints. Perren’s premium rates are higher than most of its competitors, however some of its products provide the widest range of cover in the market. The relatively high premium rates mean that it has proved particularly difficult to increase the numbers of direct dealing customers. Against an uncertain national economic background an increasing number of insurance brokers are moving customers to those insurers who focus on price competition. The objective of Perren’s Board is to increase customer numbers to ensure that the gross written premium exceeds £2.1 billion in 2014. You have been asked to undertake a market positioning review which is to be based on customer perception of Perren’s brand in relation to competitors in the market. Question Write a market positioning review and explain how you will apply the marketing mix to optimise current strengths and better manage the weaknesses of the organisation. Explain how the application of your suggestions will increase gross written premium and customer numbers without adversely affecting your underwriting results.

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PART II Scenarios. Answer TWO of the following THREE questions. Each question is worth 40 marks. To gain maximum marks you should include relevant examples and further reading in your answer.

2.

Scenario You are the Marketing Manager for RES Insurance. All existing business is currently written exclusively through insurance brokers. Research has indicated that there is an opportunity for a household insurance product which would be a new line of business for this company. Question With regard to the potential new household product:  describe the various distribution channels that could be used;  evaluate the effectiveness of these various distribution channels in relation to successful writing of household insurance products;  justify which distribution channels you would choose to be the most suitable for this product.

3.

Scenario You work for an insurance company and have been given a project to review a mature product which is no longer growing in customer numbers. The product is profitable and the Board have asked for an analysis of the opportunities to extend the life of this product. Question Explain why customer numbers for this product are no longer growing with reference to the product life cycle. Outline possible approaches to extend the life of this product giving relevant examples.

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(40)

Scenario You are the Marketing Manager for PQR which is a non-life insurer writing a range of insurance products sold direct to personal customers. You have been asked by the Marketing Director to develop a customer service plan to improve customer service. Question Develop a customer service plan for PQR and justify how it will assist in achieving competitive advantage. The plan should include examples of marketing activities that could assist in achieving this competitive advantage.

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