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Today’s Lecture Buying Insurance. Basic Principles Insurance Marketing Systems Selecting an Agent Selecting a Company Insurance Ratings Information on Service and Claims. Basic Insurance Buying Principles. Large Loss Principle Protect yourself against financially disastrous situations

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today s lecture buying insurance

Today’s LectureBuying Insurance

Basic Principles

Insurance Marketing Systems

Selecting an Agent

Selecting a Company

Insurance Ratings

Information on Service and Claims

basic insurance buying principles
Basic Insurance Buying Principles

Large Loss Principle

Protect yourself against financially disastrous situations

Liability losses

Loss of home

Loss of income

Avoid First-Dollar Coverage

Trading dollars with insurer

insurance marketing systems
Insurance Marketing Systems

Life-Health

General Agency System

Managerial System

Property-Liability

Independent Agents

Direct Writers

Brokers

Mass Merchandising

Financial Planners

insurance marketing systems example
Insurance Marketing Systems - Example

What type of marketing method does State Farm use?

A) General Agency System

B) Independent Agents

C) Direct Writers

D) Brokers

E) Mass Merchandising

selecting an agent
Selecting an Agent

Designations

CLU - Chartered Life Underwriter

ChFC - Chartered Financial Consultant

CFP - Certified Financial Planner

CPCU - Chartered Property-Casualty

Underwriter

Motivation

Independent Agent vs. Direct Writer

selecting a company
Selecting a Company

#1 Financial Strength

Prices

Contract Provisions

Service

recommended ratings for conservative insurance buyers
Recommended Ratings for Conservative Insurance Buyers

A. M. Best A++ and A+ (29%)

Duff & Phelps AAA and AA+ (43%)

Moody’s Aaa, Aa1, Aa2, and Aa3 (70%)

S&P’s AAA, AA+ and AA (66%)

Weiss A+, A, A-, B+, B and B- (14%)

company ratings prior to seizure by regulators
Company Ratings Prior to Seizure by Regulators

Executive Life - April 1991

Bests S&P Moody’s D&P

2 years A+ AAA A1 BBB+

1 year A(w) BBB Ba2 BBB-

At seizure B+ B B1 B-

company ratings prior to seizure by regulators9
Company Ratings Prior to Seizure by Regulators

Mutual Benefit - July 1991

Bests S&P Moody’s D&P

2 years A+ AAA Aa2 -

1 year A+ AA+ Aa2 -

At seizure A(c) A A3 -

compare insurance prices
Compare Insurance Prices

Obtain quotes from several different insurance companies

Contact independent agents and direct writers

contract provisions
Contract Provisions

Select the coverage you need

Compare similar policies

service
Service

Convenience

Quotations

Binders

Billing system

Claim Practices

Consumer Reports

Illinois Complaint Ratios