AIC Negotiation & Settlement Techniques 1

Question 1

Which negotiation strategy involves making an initial offer significantly higher or lower than the expected settlement to anchor the other party's expectations?

Accepted Answer

Anchoring

Answer

Anchoring is the tactic of placing an extreme initial offer to establish a reference point that influences the final settlement amount.

Question 2

In claims negotiation, a 'reservation point' refers to:

Accepted Answer

The maximum or minimum value at which a party will walk away from negotiations

Answer

A reservation point (also called a walk-away point) is the threshold beyond which a party would prefer no agreement over a bad deal.

Question 3

A BATNA in claims settlement negotiations stands for:

Accepted Answer

Best Alternative To a Negotiated Agreement

Answer

BATNA (Best Alternative To a Negotiated Agreement) defines the strongest option a party has if negotiations fail, setting the floor for acceptable settlements.

Question 4

When a claimant demands $50,000 and the adjuster offers $20,000, and both parties agree to split the difference at $35,000, this is an example of:

Accepted Answer

Compromising via midpoint settlement

Answer

Splitting the difference is a compromising strategy where both parties agree to settle at the mathematical midpoint between their stated positions.

Question 5

Which of the following best describes 'integrative bargaining' in a claims context?

Accepted Answer

Parties work together to find creative solutions that expand value for both sides

Answer

Integrative bargaining (win-win negotiation) seeks to expand the pie by addressing underlying interests rather than rigid positions, creating solutions beneficial to both parties.

AIC - Associate in Claims Practice Test

AIC - Associate in Claims Practice Test

AIC Negotiation & Settlement Techniques 1