Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What describes distribution channels in the insurance industry?

1. Strategies for pricing insurance products

2. Means through which insurance products are delivered to customers

3. Methods of marketing insurance policies

4. Legal requirements for insurance distribution

The correct answer is: Means through which insurance products are delivered to customers

The identification of distribution channels in the insurance industry as the means through which insurance products are delivered to customers is accurate. These channels encompass the various pathways that connect insurers with policyholders, facilitating the transactions needed to access insurance products. This can include direct sales through agents, brokers, online platforms, and various other intermediaries. Understanding distribution channels is crucial for insurance companies as they strive to effectively reach and serve their customers while ensuring that the delivery of products aligns with regulatory frameworks and market demands. In contrast, the other options address related aspects of the insurance business but do not specifically define distribution channels. For instance, pricing strategies pertain to how products are valued, marketing methods focus on promoting products rather than the actual distribution, and legal requirements concern compliance, which is a distinct area from the pathways used for delivering insurance products.