Scenario: You have been hired by private equity investors to start up a new well financed insurance company offering personal lines' insurance products to Cougar alumni, as well as commercial insurances for small businesses run by UH alumni.To date, your company has a very small headquarters office in Houston near to campus and is considering hiring a few salespeople to work from their homes around Texas.

Answer the following questions related to the above scenario.

a)Name your company.

b)What external and internal constraints may prevent your company from achieving its goals?

c)What form of ownership do you recommend should be adopted? Explain the reason for your choice?

d)What form or classification of insurer and licensing arrangement will you adopt? Explain why.

e)What distribution systems and channels will you use and why?

f)What advertising methods will you use and why?

g)How will you measure success financially and otherwise? Provide and briefly explain at least four measurement standards.

h)What services, if any, will you offer to your customers, in addition to your insurance policies? Explain the nature and importance of the service(s) and how you will charge for them.

i)Who will regulate your company? Why is regulation necessary? Will you need to get the Texas regulators' approval for your rates and policy wording before you sell your policies? Should your company become insolvent what will the regulators do and what can policyholders and insurance claimants expect?

j)How will you ensure your underwriters adhere to your underwriting guidelines?

k)Will you conduct premium audits? Why or why not?

l)What tools will you use to measure your claims department's quantitative and qualitive performance?

m)What actuarial approach will you use to generate your rates? Why?

n)Will you bother buying reinsurance? Why or why not?

o)Doing a very basic SWOT analysis, identify and explain at least one real or potential strength, weakness, opportunity, and threat to your new company. How will you differentiate your company?