Hi, The question relates to a travel insurer selling single-trip insurance. The director's suggestion is that overall costs as a % of premium will drop (as a result of moving to sell annual insurance online). We are asked to discuss this suggestion. Some of the ASSET answers include: - Could use external data to augment pricing - Consider impact persistency rates - Consider price -vs- product on PCWs - Company can hopefully build on brand awareness - Can look at competitor pricing These are all valid considerations for the company's new strategy, but not directly related to the direction's suggestion that costs as % premium will drop. Noting that SA3 requires a less scattergun approach, I would expect that such answers would at least be related back to the question. How can I, as an examinee infer from the question that such broader points are required? Appreciate any comments.
The 'suggestion' is not that overall costs will drop, it's that the company should start to sell annual policies over the internet (although yes, the things about costs are cited as a reasoning for the suggestion). So to discuss the suggestion is a bit wider and would include the things you mention above.
On re-reading the question, you are of course absolutely right - the question is around the wider issue. Not sure what I was reading earlier - ignore me!
