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M92 > Chapter 5 > Flashcards

Chapter 5 Flashcards

1
Q

How often does the process of strategic planning occur

A

Annually but companies will always be looking for ways to improve

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2
Q

What is the essential purpose of strategic planning

A

Set the business On a path of best performance

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3
Q

What do strategic managers do when strategy planning

A

Monitor the business environment with changes and new opportunities
With improvement in growth
Profitability
Market share
Brand presence often at the heart of the strategic ambitions

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4
Q

In large firms who do the strategy planners refer to

A

The chief executive and finance director

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5
Q

What projects do the strategy team undertake?

A

Projects for the senior executives on new areas of business

Look into expanding and developing existing business lines or operations

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6
Q

What type of research all the strategy team undertake

A 
Supply and demand
Lost history and trends
Regulatory hurdles
Staff availability and expertise
Start-up costs or business acquisition costs
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7
Q

What are the four Areas of a strategy team is principal activities

A

Mergers and acquisitions
Classes of business
Geographical spread
Partnerships

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8
Q

Under strategy focus for mergers and acquisitions access to records of the target companies is vital particularly for the buyer these include following

A

Financial records

Sales
Claims profile
Staff numbers
Service costs
Regulatory status
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9
Q

Under the strategy teams principal activities what is classes of business

A

The strategy team will look at potential for a firm to enter into new classes of business or whether they should continue in a particular class

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10
Q

Under strategy focus teams principal activities what is the focus on a geographical spread

A

They will assess penetration in areas where they believe the firm has ability to sell and service policies locally

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11
Q

What does it mean by strategy for providing insurances on a white label basis

A

It balances sufficient sales with losing the immediate brand recognition that a company may want

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12
Q

What is outsourcing

A

Outsourcing is a sub contracting of a business activity with the aim of improving the overall efficiency of the company

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13
Q

A strategy to manage costs and Access special skills and knowledge of results in what

A

Outsourcing of certain functions

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14
Q

Who do many insurance companies now outsource a claim function to

A

Third-party administrators to manage all aspects of the claims

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15
Q

What percentage of new motor insurance policies are purchased in the UK via price comparison websites

A

60%

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16
Q

What will the strategy development Process consider in order to match the planning period with the strategic objectives

A

Various time horizons

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17
Q

What happens when the various elements of a strategy have been set

A

They are passed onto operational management for implementation

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18
Q

The business planning process will require business units to complete a planning document that will cover which following points:

A 
Classes of business to be written 
Maximum value to be insured
Gross premiums
Planned loss ratios
Investment strategy
Reinsurance strategy
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19
Q

Who agrees the underwriting strategy

A

Senior management

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20
Q

What do you senior management focus on with the underwriting strategy

A

Transacting a book of business where sufficient premium is acquired across all policies that claims can be met

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21
Q

What is a hierarchy of the underwriting department

A 
Top:
Director of underwriting
Head of department
Class underwriters
Section supervisors
Underwriters
Assistant underwriters
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22
Q

What is the pure risk premium

A

The part of a premium necessary to pay for losses and loss related expenses only.

It excludes other expenses such as sales and marketing

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23
Q

What information is normally provided an information pack for printing pack for underwriters for Buildings and contents

A

Construction and risk management features such as hazardous cleaning fluids

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24
Q

What information is normally provided an information pack for underwriters for
BI

A

Details of earnings over the last three years are projected earnings for one or two years going forward

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25
Q

What information is normally provided an information pack for underwriters for EL

A

Number of staff an estimated annual payroll

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26
Q

What information is normally provided an information pack for underwriters for PL

A

A description of a type of product produced an annual turnover

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27
Q

What information is normally provided an information pack for underwriters for Directors and officers

A

Number of directors and details of shareholders

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28
Q

What information is normally provided an information pack for underwriters for motor

A

Details of all vehicles including any security devices fitted

29
Q

What information is normally provided an information pack for underwriters for claims

A

A schedule of all losses over last five years

30
Q

We are delegated authority the Party to whom authorities been delegated is known as what

A

The coverholder

31
Q

What is an agreement to set up between the parties which sets out the Scope and extent of the authority delegated to the Cover holder

A

Binding authority

32
Q

What is the attraction of delegated authority from insurers point of you

A

The flow of business arising from a tailored policy wording

33
Q

What is a managing general agent

A

they don’t just hold the under writing pen they also undertake other activities such as marketing, selling admin

34
Q

Do you managing general agents provide funding for claims

A

No although it may undertake claim payments from a fund provided by the insurer

35
Q

What is a line slip

A

An agreement between an individual broker and a group of two or more insurers whereby each insurer agreed to accept a pre-agreed proportion of a specified type of insurance

36
Q

B- Who will do research on behalf of the board? (Strategy)

A

Strategy planner / senior managers

37
Q

B - what is swot

A

Strength
Weakness
Opportunities
Threats

38
Q

B- what do the strategy team do?

A 
Use swot
Work out weather its m&a
Launch new projects 
Reach new territories
Different distribution channels
39
Q

B - what are the different types of actuary include

A

Pricing to predict loss rstes for a business
Reserving
Modelling specialist
Solvency capital specialist

40
Q

B - in actuaries what does it not include

A

Claims

41
Q

B- what does a modelling specialist do in actuaries

A

What impact storm or flood would have on a portfolio

42
Q

B - What is risk management

A

Identification, analysis and control of all risk

43
Q

B - what are the parts of a risk process

A

Inherent risks
Residual risks
Risk ranking
Risk register

44
Q

B - What do the parts of the risk process help do?

A

Can identify the risk and help determine how to control the risks

45
Q

B - what will the risk manager look at?

A 
Strategic risk
Insurnace pricing and reserving tisk
Investment / market risk
Credit risk
Operational tisk 
Group tisk
46
Q

B- in risk management what is credit risk

A

Both not being paid premium and not being reimbursed by the reinsurer due to the bankruptcy

47
Q

B - in risk management what is meant by operationsl risk

A

Not enough staff / better staff / better equitment

FUNCTION MANAGER

48
Q

B - what does the facility manager

A 
Help staff morale 
IT equipment 
Desks / chairs
Creating a nice office
Find a premises
49
Q

What is the consumers rights act 2015

A

Focuses on unfair contract terms unfair treatment of customers

50
Q

What three elements are part of customer service

A
  1. Pre-transactional (staff training and preparation)
    1. Transactional (customer service demands and delivery)
  2. Post transactional (claims handling handling complaints cross selling)
51
Q



How do general business pricing actuaries provide support to the underwriting team

A

By predicting loss ratio is based on historical performance of the book

52
Q

How do actuaries help with reserving

A

They undertake extensive reviews of the initial reserve seat against a claim compare to the final actual costs in order to assess the trends

53
Q

How do actuaris support the solvency capital

A

They look at the risks to the business such as credit, market, operational, group, strategic and reserving to calculate the worst case scenario

54
Q

A- What is a logical process of a risk management identification analysis

A

1- identifying the firms strategic objectives
2- risk identification (brainstorming, site visit, scenario analysis, flow process analysis)
3- risk analysis (looking at the probability of a risk event happening and the impact on the objectives of the company)
4- risk reporting
5- monitoring and iteration 

55
Q

a- What is a risk register

A

A centralised data source on all risks the company is known to face and it is a job at the risk management department to keep it current and report significant findings

56
Q

In the risk analysis how will risk to be assessed

A

From both an inherent and residual viewpoint

57
Q

How does the inherent analysis describe the risk

A

Without any special controls applied except perhaps the basic common sense controls. For example what is the risk of injury you would expect people to take reasonable control

58
Q

What is the residual risk

A

Should somebody have safety training such as guidance on lifting heavy objects reduce the risk to acceptable residual risk

59
Q

 What is the RAG rating when risk ranking

A

Any risks in a red (9 to 15) category warrant immediate attention in a process of risk reduction will be remain recommended this is known as the red amber, green rating

60
Q

What are the three main types of assets

A

Premiums, shareholders funds retained profit and loans, claim reserves

61
Q

What Does the role of the investment department include

A

Discussions with strategy, underwriting and close colleagues to gain an understanding of the nature of the insurances that the company plans to write

62
Q

What is the finance director

A

A key member of a strategy development team and company leadership they make decisions regarding the insurance to be transactions, management of costs and expenses, investment strategy and capital raising

63
Q

How does the finance team help with solvency II

A

They are responsible for setting asset and liability, market and credit risks

64
Q

Who insures that the administrative operations under the companies act 2006 and stock exchange listing rules are compliant with

A

The company secretarial function

65
Q

Who looks after all the documentation, filings and registration is required by companies house, including the registration of companies directors

A

The company secretary

66
Q

What is outsourced internal audit

A

Where external consultants may be engaged to undertake the work

67
Q

Who do internal auditors report to

A

The chairman of the audit committee who is a non-executive director of the board
The senior executive such as a finance director or chief executive

68
Q

Who is responsible for ensuring that all procedures required for salary payment or replace an operating effectively

A

The HR team

69
Q

What does the FM team do

A

Only takes maintenance, operation, cleaning and repair and security of the premises

M92 (12 decks)

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