Vertical Integration in the Property-Liability Insurance Industry: A Transaction Cost Approach

Regan, Laureen

doi:10.2307/253911

Cited by 88 publications

(78 citation statements)

References 28 publications

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“…Research on channel distribution in insurance has also focused on issues related to channel efficiency, cost, and quality and information search. In these studies, indirect intermediary channel demand is linked to client needs and capabilities (e.g., Mass, 2010), company ownership (e.g., Lamm-Tennant & Starks, 1993), market size (e.g., Cummins & Doherty, 2006), and environmental uncertainty (e.g., Regan, 1997). An exception is Black et al (2002), who examined the determinants of direct or indirect channel usage from a consumer perspective.…”

Section: Literature Review Summarymentioning

confidence: 99%

“…This principle is also in line with transaction cost theory, which recognizes that during a transaction, transaction costs are incurred in addition to production costs. Thus, the optimal organizational form is one that minimizes the sum of production and transaction costs (Regan, 1997). Thus, under the assumption that insurance brokers help mitigate risks related to insurance transactions and policy management, we hypothesize that consumers with higher perceived risks perceive greater value in broker channels than those with lower perceived risks.…”

Section: Perceived Risk and Value In A B2b Contextmentioning

confidence: 99%

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Antecedents of Channel Choice in Business-To-Business Professional Services:Focus on the Insurance Sector

Asaad¹

2016

JMM

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An increasing number of companies in the professional service sector are using two or more distribution channels to market their products, multichannel strategy that has become a dominant channel design. However, research on channel choices in professional services remains limited. Thus, this study aims to examine antecedents of channel choice in services with focus on Saudi Arabia's insurance sector. The study adopts a quantitative research method and value-based framework to analyze the survey responses of 84 representatives of corporate customers on channel choice decisions when purchasing insurance. In addition, it examines the impact of three key explanatory variables-product class knowledge, perceived transaction risk, and task complexity-in relation to perceived broker channel value, and the affect of channel value on channel choice. The findings evidence that product class knowledge and perceived transaction risk influence perceived broker channel value, and that increased broker channel value leads to greater intentions of broker channel usage. This reiterates the importance of understanding factors influencing consumers in their choice of channels. Further, insurance brokers, particularly those in developing insurance markets, should go beyond the traditional "supplier" role, involving quotations soliciting and pricing negotiations, and focus on value creation. Finally, insurance companies must acknowledge that insurance brokers play a crucial role in developing the client-insurer relationship.

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Section: Literature Review Summarymentioning

confidence: 99%

Section: Perceived Risk and Value In A B2b Contextmentioning

confidence: 99%

Antecedents of Channel Choice in Business-To-Business Professional Services:Focus on the Insurance Sector

Asaad¹

2016

JMM

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“…10 Studien, wie Kim et al (1996) sowie Berger et al (1997) Marvel (1982), Sass und Gisser (1989), Kim et al (1996), Regan und Tennyson (1996) sowie Regan (1997Regan ( , 1999 In Bezug auf die Effizienz zeigen auch zwei Vergleiche von Gravelle (1993Gravelle ( , 1994 Risk Insur. 70, 515-546 (1997) …”

Section: Alternativ Können Kostenunterschiede Zwischen Anbietern Auf unclassified

Ökonomische Aspekte der Entlohnung und Regulierung unabhängiger Versicherungsvermittler

Schiller

2010

ZVersWiss

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe compensation and regulation of independent intermediaries is an important issue in insurance markets. With this respect, the profitability and importance of fee-for-service and commission compensation of intermediaries is lively discussed in academia and in the insurance industry. This paper summarizes economic rationales why and in which lines of business insurance companies sell their products via independent intermediaries. With this respect, it is analyzed how different forms of compensation affect important market functions of independent intermediaries. Finally, the economic impact of certain regulatory interventions, like a mandatory disclosure or a general ban of any commissions and the German ban for intermediaries to share commission with policyholders, on market efficiency is discussed. * Erweiterte schriftliche Fassung eines Vortrags am 10. März 2010 auf der Jahrestagung des Deutschen Vereins für Versicherungswissenschaft in Düsseldorf.

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“…9 Insurance policies were distributed through the independent agencies (brokerage firms) and direct underwriting systems. In Taiwan's automobile 2 Joskow (1973); Cummins (1977); Cummins and VanDerhei (1979); Mayers and Smith (1981) ;Marvel (1982); Sass and Gisser (1989); Barrese and Nelson (1992); Blair and Herndon (1994); Kim et al (1996); Regan and Tennyson (1996);Regan (1997); Berger et al (1997); Regan and Tzeng (1999); Klumpes (2004); Klumpes and Schuermann (2011). 3 Posey and Yavas (1995); Kim et al (1996); Berger et al (1997); Posey and Tennyson (1998);Seog (1999); Venezia et al (1999);Trigo-Gamarra (2008).…”

Section: Introductionmentioning

confidence: 99%

Insurance Marketing Channel as a Screening Mechanism: Empirical Evidences from Taiwan Automobile Insurance Market

Hsieh

Liu

Tzeng

2013

Geneva Pap Risk Insur Issues Pract

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Venezia, Galai and Shapira in 1999 proposed a theoretical framework that considers asymmetric information to explain the co-existence of the independent agent and direct underwriting systems in the insurance market. In separating equilibrium, high-risk clients tend to purchase insurance through independent agents, whereas low-risk clients prefer dealing directly with underwriters. Using a unique data set from Taiwan's automobile liability insurance, this paper tests the screening mechanism hypothesis proposed by Venezia, Galai and Shapira. The results reveal that a positive channel-claim correlation exists in the subsamples of cars aged more than three years. Significant positive channel-claim correlation indicates that high-risk policyholders prefer to purchase insurance from an independent agent, whereas those with lower risks tend to buy insurance from direct writer channels. The results support the screening mechanism hypothesis and demonstrate that marketing channel choice could serve as a screening mechanism in an insurance market characterised by asymmetric information.

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Vertical Integration in the Property-Liability Insurance Industry: A Transaction Cost Approach

Cited by 88 publications

References 28 publications

Antecedents of Channel Choice in Business-To-Business Professional Services:Focus on the Insurance Sector

Antecedents of Channel Choice in Business-To-Business Professional Services:Focus on the Insurance Sector

Ökonomische Aspekte der Entlohnung und Regulierung unabhängiger Versicherungsvermittler

Insurance Marketing Channel as a Screening Mechanism: Empirical Evidences from Taiwan Automobile Insurance Market

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