Which of the following is an example of internal constraints faced by an insurance company?

The answer is correct because technology capabilities are indeed an example of an internal constraint faced by an insurance company. Internal constraints refer to limitations that arise from within the organization itself. Technology capabilities can significantly impact an insurer's operations, efficiency, and ability to offer competitive products. If an insurance company lacks state-of-the-art technology systems, it may struggle to process claims effectively, manage customer data securely, or provide timely services. Therefore, the technological resources and infrastructure available within the company directly influence its operations and effectiveness.

Other factors like market competition, regulatory environment, and economic conditions are primarily external constraints. While they can affect the company's strategy and operations, they originate outside of the company's internal structure and resources. Thus, they do not represent constraints that arise from the company's own operations or capabilities, setting technology capabilities apart as a vital internal factor.