Remeber this is uk business and insurance. do not reference foreign regulations, have uploaded study text for reference where needed.
You are the Insurance Compliance Manager for PMB Ltd, a large supermarket group. PMB Ltd generates a proportion of its income from the sale of insurance to its customers.
The Board of PMB Ltd has identified its retail insurance business as a significant area for future growth and profit. PMB Ltd offers its customers car, household and travel insurance, with premium discounts for those customers who hold multiple insurance products.
The Board of PMB Ltd has decided to introduce a new customer reward points scheme, where customers earn points when they buy goods and other services from PMB Ltd. This will include insurance products and its ancillary add-on products.
Consequently, PMB Ltd are going to remove the current discount for all customers holding multiple insurance products and replace this with the new reward points scheme. However, the value of the reward points earned for buying its insurance products is substantially less than the value of the previous discount for holding multiple insurance products.
The Board of PMB Ltd has asked you to write a report assessing the new reward scheme, including ensuring that the retail insurance business is commercially sustainable and regulatory compliant.
(a) Explain briefly, two significant benefits and two significant challenges for PMB Ltd’s customers of this new reward points scheme in relation to the purchase of insurance products. (8)
(b) Explain briefly, three significant benefits and three significant challenges for PMB Ltd whenintroducing this new reward points scheme in relation to the purchase of insurance products. (12)
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(c) Discuss how you would advise PMB Ltd’s Board to implement this new reward points scheme,
ensuring a solution that is both commercially sustainable and regulatory compliant. (10)
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