Honorarberatung – Einstellung und Relevanz auf dem Versicherungsmarkt

In the area of insurance intermediaries, fee-based advisory is the widely discussed alternative type of remuneration to the standard commission system. The aim of this study is to comprehensively analyze the attitude of independent insurance brokers to the direct commission system. In total, 23 interviews with experts were conducted to gather insights into the significance and the behaviour of insurance brokers. Thus, differences (level of attitude) between the interviewed experts as well as factors influencing their attitudes can be identified.     

Kundenbindung in der Versicherungswirtschaft: Ergebnisse einer theoretischen und empirischen Analyse

In this article customer retention is analysed both theoretically and empirically, especially the retention of customer to insurance intermediaries. After the construct of customer retention has been conceptualised, the determinants of customer retention in the insurance business are derived. The empirical analysis is based on interviews of German customers of an internationaly operating financial services company. A total of 1,003 interviews were conducted. The analysis of customer retention through the usage of structural equation modelling forms the main part of this article. A comparison of three methods — structural equation modelling, neural networks and decision trees — shows that they are complementary and a combined application of these methods brings additional insights. On the basis of the determinants of customer retention, a typology of customers is built through hierarchical cluster analysis. The management of customer retention can be realised either by manipulating the determinants of customer retention or by ad dressing the identified customer types with a segment specific marketing mix.     

An exploratory study into the implementation of internal marketing in small insurance brokers in the United Kingdom

The purpose of this article is to explore internal marketing in the United Kingdom small insurance brokers. Most research on internal marketing has been conducted in large firms. Consequently, research in this field in small firms, particularly small insurance brokers, has been limited despite their significance to the UK economy. In this study, interviews were conducted with 12 UK small general insurance brokers to explore their understanding and implementation of internal marketing. The findings indicate that internal marketing is used informally and that there are some linkages between the elements of internal marketing. This study contributes to knowledge by identifying the impact of the size of broker and the Treating Customers Fairly regulations on the formality of internal marketing. In practice, managers should give more attention to internal marketing activities in order to achieve the company's aims of customer orientation and better performance.     

‘Who owns the customer?’: A commentary on channel debate through the eyes of the customer

Amid intense changing competitive environments in the insurance industry, insurance manufacturers and intermediaries are preparing themselves to be closer than ever to their customers. But are they collaborating to serve the customer or are they still playing ‘tug of war’ over who owns the customer, while their customers seek greener pastures with the competition? In this paper the authors discuss six realities of customers and the insurance industry today and finish with suggestions on how collaboration between manufacturer and intermediaries will help serve the common interest of building stronger customer relationships.     

An analysis of the carrying capacity and life process risks of UK and Turkish insurance intermediaries

The primary aim of this paper is to examine the strategic risks associated with environmental selection and how this affects the life process risks of insurance intermediaries. To achieve this aim; firstly the carrying capacity of UK and Turkish insurance intermediaries is calculated and, secondly, the demographic, ecological and environmental variables that affect that carrying capacity are examined. Our study provides two contributions to the literature. For the first time, carrying capacity analysis is applied for an organisational community. As much as previous studies assume the existence of carrying capacity as theoretical, it has not been previously calculated on a quantitative basis. The second contribution is related to risk and insurance literature, specifically the life process risks of insurance intermediaries. The main rationale behind that analysis is the construction of a map that will simplify the strategic risk and reward decisions of insurers as to which areas are potentially profitable, or are indicative of fruitful relationships with intermediaries. Additionally, this research enables us to identify the areas that have potential for development in terms of insurance. For this reason, uncertainties relating to the selection of authorised brokers/agents as a strategic risk is, perhaps, minimised. Moreover, we have examined whether probable variables that can affect carrying capacity have contextual differences or not. The findings exhibit that there is contextual differentiations concerning the variables that affect the carrying capacity of both countries.     

Digital insurance brokers—old wine in new bottles? How digital brokers create value

This article analyzes digital brokers in the countries of the DACH region, Germany, Austria, and Switzerland, from a business model perspective. We argue that the potential to create new value for insurance customers has not yet been fully realized. Our analysis has identified two strategic action areas. The first concerns the exploitation of the wealth of customer data available. Those digital brokers who will succeed in generating new content and services using data analytics have the potential to take customer centricity and individuality to new bounds. The second centers around introducing aspects of community, such as connecting peers and enabling them to interact. The critical success factors are volume, a high degree of automation as well as leveraging the infrastructure and data to delivering new, value-adding content and services that go beyond traditional intermediation.     

Gewinn- versus Kundenorientierung: Welche Ziele verfolgen deutsche Versicherungsvermittler?

Insurance intermediaries are criticized for behaving consistent with incentives given by insurers and disregarding customer interests. Fees paid by customers should replace commissions paid by insurers. Both the European Commission and the German Government proposed several measures to encourage fee-based advice as well as to ban commissions for PRIP-products mediated by brokers. Associations of intermediaries argue in opposition to politics that their members are interested in long-lasting customer relationships. This study answers the question which targets (customer orientation or profit orientation) intermediaries follow. Empiric results show that intermediaries follow four strategic targets—fairness, profit orientation, quality of life and sustainability of company. Fairness means customer orientation. Intermediaries can be divided into short-term and long-term oriented entrepreneurs. Disparities in the kind of orientation cannot be explained by kind of intermediary (broker or agent) solitary. The results are interesting for regulators who intend to save long-term interests of customers.     

Customers and investors: A framework for understanding the evolution of financial institutions

Financial institutions are financed by both investors and customers. Investors expect an appropriate risk-adjusted return for providing financing and risk bearing. Customers, in contrast, provide financing in exchange for specific services, and want the service fulfillment to be free of the intermediary's credit risk. We develop a framework that defines the roles of customers and investors in intermediaries, and use it to build an economic theory that has the following main findings. First, with positive net social surplus in the intermediary-customer relationship, the efficient (first best) contract completely insulates the customer from the intermediary's credit risk, thereby exposing the customer only to the risk inherent in the contract terms. Second, when intermediaries face financing frictions, the second-best contract may expose the customer to some intermediary credit risk, generating “customer contract fulfillment” costs. Third, the efficiency loss associated with these costs in the second best rationalizes government guarantees like deposit insurance even when there is no threat of bank runs. We further discuss the implications of this customer-investor nexus for numerous issues related to the design of contracts between financial intermediaries and their customers, the sharing of risks between them, ex ante efficient institutional design, regulatory practices, and the evolving boundaries between banks and financial markets.     

Informations- und Beratungspflichten des Versicherers nach der VVG-Reform

The insurer’s duty to enable the customer to come to an appropriate decision, providing advice and information, is a central topic of the reform of the German insurance contract law. The obligations of intermediaries given by the Directive 2002/92/EC on insurance mediation are transferred to insurers and thereby enlarged in some aspects. The duty to give advice in §6 I 1 VVG depends on the objective circumstances of each individual case depending upon either the complexity of the insurance contract and problems in understanding its terms, or the characteristics and situation of the customer. Therewith, the regulation both refers to former jurisdiction and exceeds it by implementing a duty for the insurer to ask for the demands and the needs of the customer. Without reason in the special case the customer has to disclose his need for advice to obtain it. During the term of the contract the insurer is only obliged to give advice if he knows or — acting diligently — could know the needs of the policy-holder. On a European level further duties to inform and advise could help to achieve an effective internal insurance market.     

Darstellung und Abgrenzung des deutschen Versicherungsvermittlungsmarktes

Insurance intermediation is mostly known as a distribution entity of insurance companies. Therefore only limited research has focused on German insurance intermediaries as an independent market. The business of insurance intermediaries can not only be limited on selling policies, they also offer other services to policyholders. The aim of this paper is threefold. First, we explain the structure as well as the legal and the fiscal characteristics within the insurance intermediation market. Second, we describe the business of German intermediaries. Third, we show that this market can be defined as an independent market.     

Europäische Richtlinie über Versicherungsvermittlung und VVG-Reform

The directive on insurance mediation, proposed by the European Commission, is supposed to secure a minimum standard of professional competence for intermediaries to protect customers as well as to ascertain the intermediaries’ freedom of establishment and freedom to provide services in the internal market. Pursuant to the directive, only an intermediary who is registered in his / her home country’s intermediary register will be allowed to mediate insurances. The intermediary has to comply with professional requirements set by the directive in order to be registered. Yet, part-time intermediaries can be exempted from those requirements by the member states. Additionally, the intermediaries are burdened with certain information and documentation duties towards their customers, a breach of which will cause personal liability. Only these contractual duties are to be implemented in the WG (German Insurance Act), which is soon to be basically reformed.     

The sales force as an information transfer mechanism for new service development in the Thai insurance industry

New service development (NSD) is becoming increasingly important as the insurance industry in many countries opens up and becomes more competitive. This paper examines how customer views are integrated into the NSD process in the Thai insurance industry. The qualitative research was conducted using in-depth interviews with top officers, sales managers, senior vice-presidents of marketing and actuary managers in a number of leading life insurance and non-life insurance companies. The interviews investigated how NSD works in the Thai industry, focusing on how customer views enter the process. The results showed that the NSD process in Thailand is not oriented towards developing truly innovative products, but there is much NSD for adaptation of products from other markets. Sales agents act as a main information transfer mechanism, bringing in customer views through the sales managers, who play a role in NSD. Lack of cross-functional teamwork can cause failure in developing new products and services.     

Wandel der Beratungsqualität auf dem Versicherungsvermittlungsmarkt: Eine ökonomische Analyse der Veränderungen aufgrund der Anforderungen der EU-Vermittlerrichtlinie

The EU-Directive on insurance mediation has introduced an important and sustainable change to the insurance brokerage market with special regard to the quality of the consulting services. The restructuring is necessary due to the increased administration costs of the business accreditation in conjunction with the increased workload. Dependent on the remuneration system—a commission system vs. a fee vs. a mixed commission—, different scenarios for the market organization are possible. This has consequences for the distribution policy. In this situation, the most obvious model seems to be the one, where the insurance brokers specialize and provide only selected type of consulting services. Furthermore, the analysis shows possible influences of further regulation of the insurance brokerage market, which could result in an increase of brokerage costs. This paper continues the actual political discussions regarding the form and basis of remuneration.     

The Economics of Insurance Intermediaries

This article analyzes the economic functions of independent insurance intermediaries (brokers and independent agents), focusing on the commercial property–casualty insurance market. The article investigates the functions performed by intermediaries, the competitiveness of the market, the compensation arrangements for intermediaries, and the process by which policies are placed with insurers. Insurance intermediaries are essentially market makers who match the insurance needs of policyholders with insurers who have the capability of meeting those needs. Intermediary compensation comprises premium‐based commissions, expressed as a percentage of the premium paid, and contingent commissions based on the profitability, persistency, and/or volume of the business placed with the insurer. Empirical evidence is provided that premium‐based and contingent commissions are passed on to policyholders in the premium. However, contingent commissions can enhance competitive bidding by aligning the insurer's and the intermediary's interests. This alignment of interests gives insurers more confidence in the selection of risks and thus helps to break the “winner's curse” and encourages insurers to bid more aggressively. Independent intermediaries also help markets operate more efficiently by reducing the information asymmetries between insurers and buyers that can cause adverse selection.     

论商事实践张力与法律文本抑制间的博弈——以保险经纪人双方代理法律地位为视角

我国保险法规定保险经纪人基于投保人利益开展经营活动,学术界的观点也寓于此规定。而实践中,已出现保险经纪人代表保险人从事保险事务的情形,形成双方代理。现有制度和理论已不能有效解决这一问题。须立足商事实践、借鉴国外法经验对保险经纪人的法律地位作重新定位。对保险经纪人的法律地位应采用综合说,现行保险法律制度也应作适当调整。     

On the Implications of the Internet for Insurance Markets and Institutions

By most accounts, the Internet and related advances in information technology significantly affect financial services in general and insurance markets and institutions in particular. Coupled with other important trends such as globalization and regulatory reform, these changes are forcing far‐reaching changes upon the insurance industry and making it more competitive. This article focuses specifically on the implications of the Internet for insurance markets and institutions. The conventional wisdom that the Internet constitutes a sufficient condition for the disintermediation of traditional insurance distribution networks is called into question. To the extent that the Internet reduces transaction costs, it will create opportunities for new intermediaries as well as for existing ones. It will also influence product design, in some cases making it economically attractive to unbundle and repackage various forms of coverage. By removing entry barriers and reducing insurance costs, the Internet will also provide a private market solution to a major insurance regulatory concern—enhancing insurance affordability and availability.     

A systems view of relationship dissolution

This article examines the process of termination in a business relationship between insurance brokers and their corporate clients in the UK. In previous studies, it has been widely recognised that a business relationship goes through different stages and, arguably, its ending emerges mostly at the last stage of the process. In this paper we argue that, due to the nature of the cyclical process in this business, termination can take place at any time or stage through the whole relationship development process. Significant points are identified where the relationship is most vulnerable. The results reflect a survey of insurance broker's clients and follow-up in-depth interviews with senior insurance brokers.     

RELATIVE EFFICIENCIES OF NON-LIFE REINSURANCE MARKETING METHODS

Abstract: This paper extends the study of the relative cost efficiency of insurance delivery systems from the primary market to the market for non-life reinsurance services. As in the primary market for insurance services there are two predominant methods of marketing reinsurance services: reinsurers who rely on employees, termed direct writers, and those who rely on brokers.
An extensive literature relating to the primary market for non-life insurance consistently indicates that independent agency insurers have a cost disadvantage relative to exclusive agency insurers. This literature also suggests that independent agency insurers may supply superior service but a continuing erosion of the market share of independent agency insurers suggests that the perceived service differential is not valued sufficiently to offset the perceived cost differential.
The authors find evidence that, cet. par., broker supplied reinsurers operate with lower costs than direct reinsurers but we find less convincing evidence of a service differential favoring direct reinsurers. More significantly, we observe that the largest component of the traditional measure of the reinsurer's cost is the commission paid back to the primary insurer: the seemingly lower cost brokers provide a higher net cost product. Yet brokers thrive in the marketplace suggesting the existence of a product differentiated by service or quality. With the important caveat that measures of service are imperfect and data is limited, we find no evidence of a service differential.     

Das Versicherungsvermittlerrecht nach der Reform

The EC Directive on insurance mediation has been implemented into German Law two and a half years late by the Insurance Intermediary Law Revision Act of 19^th December 2006, which has been enacted on 22^nd May 2007. On the one hand, this Act contains regulations on the professional law which are provided in the Industrial Code (Gewerbeordnung — GewO). In principle according to section 34d GewO, professional insurance intermediation is an activity requiring a licence. This licence is only granted under the condition that the applicant is able to present the conclusion of a professional indemnity insurance and a certificate that the applicant has passed an examination of knowledge and ability held by the chambers of industry and commerce (IHK). In fact, the exceptions from this principle prevail. Tied insurance agents are exempted from both conditions by act of law. Product accessory intermediaries can be exempted from the examination of knowledge and ability upon application. Employees of an insurance intermediary need to prove their knowledge and ability only to their employer. On the other hand the Insurance Intermediary Law Revision Act contains besides the regulations on professional law also new obligations of information, communication and consultation for the insurance intermediary. These obligations have been implemented into a professional law ordinance and into sections 42b und 42c Insurance Contract Act (VVG). The ordinance regulates the obligations of the insurance intermediary to provide the customer with information about his status. Sec 42b (1) VVG regulates the obligation of an insurance broker to give an advice on the basis of an analysis of a sufficiently large number of insurance contracts and insurance undertakings. Sec 42b (2) VVG regulates obligations of an insurance agent to inform the customer before the conclusion of an insurance contract about the market conditions and information basis he uses for his service, if the customer has not waived this right (sec 42b (3) VVG). Sec 42c (1) VVG further provides an obligation of the insurance intermediary to ask questions depending on the situation, an obligation to give advice depending on the situation and on the price of the product including an obligation to tell the reasons for the advice and finally an obligation of documentation. Sec 42c (2) VVG gives the consumer a right to express a waiver in writing to advice and documentation. Sec 42e VVG awards the costumer damages in the event that there has been a breach of the obligations regulated in sec 42b and 42c VVG. The Insurance Contract Law Reform Bill still has to be passed by parliament. Sec 1 of this Bill contains the new Insurance Contract Act. It is planned that this new Insurance Contract Act shall be enacted on 1^st January 2008. Sec 69 to 73 new Insurance Contract Act provide a complete revision of the law of the insurance agent’s representative authority which is now regulated in sec 43 to 48 of the old Insurance Contract Act (VVG). At the moment the law of insurance agent’s representative authority established by the courts differs extremely from the written law. Therefore the new Insurance Contract Act will bring only minor changes of the actual law. For most parts, the only aim of the reform is to adapt the law in action with the law in the book.     

Corporate Insurance as a Necessary Form of Consultant–Investigator Contract

Existing literature argues that corporate insurance is purchased because the insurance company produces risk management information for publicly held corporations. In this article, we address a fundamental question as to why other financial intermediaries cannot perform the same information production function as the insurance company. We argue that when the risk manager of the firm performs multiple tasks and needs consulting and investigation services from an outside agent for efficient risk management, the optimal contract with the agent has to be in the form of an insurance contract. Other types of contracts, such as flat-fee contracts, cannot be optimal. Therefore, the insurance company is ideally suited to provides these services.