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UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN College of Commerce and Business Administration DEPARTMENT OF FINANCE Finance 341 Assignment 2 Spring, 2003 Due: February 11, 2003 Access the homepage for Prudential Financial (www.prudential.com) to determine the answers to the first three questions: 1. For an Illinois auto insurance customer, would Prudential be a domestic, foreign or alien insurer? 2. What is Prudential’s predominant form of distribution system for auto insurance? 3. Is Prudential a Proprietary or Cooperative Insurer? 4. There are several external constraints on achieving objectives that insurances companies face. List two actions that an insurance company might take to overcome a public opinion constraint. 5. What is the primary difference between INA's and Allstate's approach to adopting a combination insurance distribution system? 6. Assume you work for GEICO insurance and enjoy your job of selling insurance so much, that you decide to go out on your own as an independent agent. Would you or GEICO be in possession of the ownership of expirations? 7. Based on what you know about Liberty Mutual (http://www.libertymutual.com), what Philosophy of Marketing Management would best describe that company? Select, and justify, only one concept. 8. An insurer specializes in insuring supermarkets for property damage and liability coverage. What Growth Strategy would apply if this insurer wanted to gain a larger market share of this business? Explain your answer. 9. You are a line underwriter for a property-liability insurer. You receive an application for homeowners insurance coverage from a new customer. The only concern you have about writing this policy is that both the mother and father smoke. List two questions you would ask the applicant before deciding whether or not to accept this application. 10. One of your roommates is a terrible driver and is concerned about being able to buy insurance. Your roommate knows that the state in which he plans to buy insurance has a Joint Underwriting Association for a residual market, but he is not sure what it is or how it works. In terms that your non-finance major roommate could understand, briefly explain how a Joint Underwriting Association works. Fin 341 - Assignment 2 Answer Sheet Name_________________________ (This sheet is for your answers only. Attach it to the front of your worksheets.) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
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