Question

What considerations relating to existing markets might an insurance company evaluate during the process of selecting distribution systems and channels?

Answer 1

When selecting distribution systems and channels, an insurance company considers the target market, competitors, and regulations.

Step-by-step explanation:

When selecting distribution systems and channels, an insurance company needs to consider various aspects related to existing markets. These considerations include:

1. Target Market: The insurance company needs to evaluate the characteristics and needs of the market it wants to reach. This includes analyzing demographics, income levels, consumer behavior, and the demand for insurance products.
2. Competitors: The company should assess the competitive landscape in the existing market. This involves identifying and analyzing other insurance companies operating in the same market, their distribution systems, and the strengths and weaknesses of their channels.
3. Regulations: Insurance companies need to be aware of the local regulations and compliance requirements in the existing market. This includes understanding licensing requirements, consumer protection laws, and any specific regulations related to distribution systems and channels.

By carefully evaluating these considerations, an insurance company can make informed decisions about selecting the most suitable distribution systems and channels for a particular market.