Casualty Actuarial Society (CAS) Practice Exam

Insurers often look at various strategies to optimize their acquisition expenses, and one effective method is utilizing alternative distribution channels. By exploring different avenues for reaching potential customers, insurers can enhance their marketing effectiveness while potentially lowering costs.

For instance, engaging in online sales, partnering with digital platforms, or using third-party administrators can help insurers reach broader audiences and streamline their distribution processes. This approach often allows for a more efficient allocation of resources, as digital channels can reduce the need for extensive physical marketing efforts or traditional sales personnel.

Utilizing alternative distribution not only helps in cutting costs associated with traditional methods but can also lead to better customer reach and engagement. This aligns well with the overall aim of insurers to maximize the return on their marketing investments and reduce unnecessary expense burdens.

Other options, such as increasing payroll, eliminating marketing efforts entirely, or raising commissions, may not effectively address the goal of reducing acquisition expenses. These strategies could lead to increased overall costs or diminished effectiveness in reaching new customers.