Alberta General Insurance Level 1 Practice Exam

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How do independent agents (agencies) typically encourage growth?

  1. By offering lower premiums

  2. Through higher commissions

  3. By selling multiple types of products

  4. Through salary increases

The correct answer is: Through higher commissions

Independent agents typically encourage growth through higher commissions for agents who sell more products or reach certain sales targets. Offering lower premiums (A) may be one way to attract customers, but it does not directly encourage growth for the agency. Additionally, selling multiple types of products (C) may diversify the agency's offerings, but it does not necessarily guarantee growth. Salary increases (D) may reward individual agents for their performance, but it does not provide a tangible incentive for overall agency growth. Therefore, higher commissions (B) remain the most common and effective way for independent agents to encourage growth.

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