Final answer:
An insurance company must evaluate factors such as target market, product complexity, competitive environment, regulatory compliance, and technology and infrastructure when selecting distribution systems and channels.
Step-by-step explanation:
An insurance company must evaluate several factors relating to its profile when selecting distribution systems and channels. These factors include:
- Target Market: The insurance company needs to assess the needs, preferences, and characteristics of its target market to determine the most effective distribution channels.
- Product Complexity: If the insurance products are complex and require extensive explanation or customization, the company may prefer distribution systems that involve direct sales agents or brokers.
- Competitive Environment: The insurance company should evaluate the competitive landscape and consider the distribution strategies used by its competitors.
- Regulatory Compliance: Insurance companies must comply with various laws and regulations governing distribution, such as licensing and disclosure requirements.
- Technology and Infrastructure: The company needs to consider its technological capabilities and infrastructure for supporting different distribution channels, such as online platforms.