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.     

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.     

Intermediation and (Mis‐)Matching in Insurance Markets—Who Should Pay the Insurance Broker?

This article addresses the role of independent insurance intermediaries in markets where matching is important. We compare fee‐based and commission‐based compensation systems and show that they are payoff equivalent if the intermediary is completely honest. Allowing for strategic behavior, we discuss the impact of remuneration on the quality of advice. The possibility of mismatching gives the intermediary substantial market power, which will not translate into mismatching if consumers are rational. Furthermore, we offer a rationale for the use of contingent commissions and address whether or not the ban of any commission payments is an appropriate market intervention.     

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.     

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.     

Ökonomische Aspekte der Entlohnung und Regulierung unabhängiger Versicherungsvermittler

The 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.     

What Do Investment Banks Truly Bring to the Table?

This paper investigates the role of intermediaries in the initial public offering (IPO) process. In the U.S. market, investment banks have traditionally been involved in a firm‐commitment or best‐efforts underwriting capacity. However, in the Australian IPO market, investment banks are increasingly being named in association with new issues in diverse roles such as issue managers, sponsoring brokers and corporate advisers. Using a sample of 468 IPOs over the 1996 to mid‐2006 period, we examine the influence of investment banks across these different engagements. In support of the signalling and information production roles of intermediaries, we find that issuers choosing high intermediary involvement are typically older, retain more capital, seek to raise larger amounts of capital and are without independent expert certification. We find mixed support for the certification hypothesis when testing for the effect of intermediary reputation on IPO issuer wealth loss. Further, the impact of intermediary involvement on underpricing is not significantly different for the different levels of intermediary involvement once issue characteristics have been accounted for. This is puzzling since these different roles by definition do not provide the same level of issue quality assurance.     

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.     

Estimating portfolio risk for tail risk protection strategies

We forecast portfolio risk for managing dynamic tail risk protection strategies, based on extreme value theory, expectile regression, copula‐GARCH and dynamic generalized autoregressive score models. Utilizing a loss function that overcomes the lack of elicitability for expected shortfall, we propose a novel expected shortfall (and value‐at‐risk) forecast combination approach, which dominates simple and sophisticated standalone models as well as a simple average combination approach in modeling the tail of the portfolio return distribution. While the associated dynamic risk targeting or portfolio insurance strategies provide effective downside protection, the latter strategies suffer less from inferior risk forecasts, given the defensive portfolio insurance mechanics.     

What Do We Know About Market Discipline in Insurance?

The aim of this article is to summarize the knowledge on market discipline in insurance and other financial service sectors. Market discipline can be defined as the ability of customers, investors, intermediaries (agents, brokers), and evaluators (analysts, auditors, rating agencies) to monitor and influence a company's management. Looking at banking is especially interesting, since market discipline in this field has been studied extensively. Based on existing knowledge, we develop a framework for researching market discipline in insurance that includes its most important drivers and impediments. The results highlight a significant need for continuing research. The findings are of relevance not only for European insurers and regulators, but for institutions outside Europe.     

对我国保险专业中介发展问题的思考

更高的效率与更低的成本,产业链各主体利益共赢的生存法则,是保险行业良性生态的基础。资金、人才、技术,成为制约保险专业中介做大做强的主要瓶颈。在规模化及技术进步的效率提高基础上深化与保险公司利益一致的战略合作,是其新时期发展的现实选择。以创新提升保险专业中介有效供给能力是现阶段最主要的任务。竞争发展,须由商业模式确定的战略定位及战略规划获得制高点。从专业型走向综合型,是企业组织管控能力与市场能力匹配的结果,是企业决策者基于现实资源能力深思熟虑市场战略的结果。     

制约车险理赔服务质量的因素浅析

随着机动车辆保险保障范围的逐步扩大,广大消费者对保险的售后服务即车辆出险后的理赔工作提出越来越高的要求,而作为经营主体的各家保险公司由于营业网点、人员素质、产品特色、销售渠道等不同,服务水平参差不齐。     

广西保险行业服务提升问题研究

规范服务是保险行业的核心价值理念之一。保险作为一种具有价值和使用价值的服务商品,其价值的实现依托于保险服务的提供。广西保险业目前处于快速发展阶段,保险行业服务模式存在诸多问题,阻碍着广西保险业的可持续发展,研究广西保险行业服务问题,具有重要理论价值和实践指导意义。本文探讨了保险服务的基本内涵,研究了广西保险行业服务体系的发展现状与存在问题,提出了完善广西保险服务制度的一系列对策和建议。     

On the Possibility of a Private Crop Insurance Market: A Spatial Statistics Approach

Risk theory tells us if an insurer can effectively pool a large number of individuals to reduce total risk, the insurer can then provide insurance by charging a premium close to the actuarially fair rate. However, a common belief exists that risk can be effectively pooled only when random loss is independent. Therefore crop insurance markets cannot survive without government subsidy because crop yields are not independent among growers. In this article, we take a spatial statistics approach to examine the effectiveness of risk pooling for crop insurance under correlation. We develop a method for evaluating the effectiveness of risk pooling under correlation and apply the method to three major crops in the United States: wheat, soybeans, and corn. The empirical study shows that yields for the three crops present zero or negative correlation when two counties are far apart, which complies with a weaker condition than independence, finite‐range positive dependency. The results show that effective risk pooling is possible and reveal a high possibility of a private crop insurance market in the United States.     

Ratings Quality and Borrowing Choice

Past studies document that incentive conflicts may lead issuer‐paid credit rating agencies to provide optimistically biased ratings. In this paper, we present evidence that investors question the quality of issuer‐paid ratings and raise corporate bond yields where the issuer‐paid rating is more positive than benchmark investor‐paid ratings. We also find that some firms with favorable issuer‐paid ratings substitute public bonds with borrowings from informed intermediaries to mitigate the “lemons discount” associated with poor quality ratings. Overall, our results suggest that the quality of issuer‐paid ratings has significant effects on borrowing costs and the choice of debt.     

Financial Intermediaries, Markets, and Growth

We build a model in which financial intermediaries provide insurance to households against idiosyncratic liquidity shocks. Households can invest in financial markets directly if they pay a cost. In equilibrium, the ability of intermediaries to share risk is constrained by the market. From a growth perspective, this can be beneficial because intermediaries invest less in the productive technology when they provide more risk-sharing. Our model predicts that bank-oriented economies can grow more slowly than more market-oriented economies, which is consistent with some recent empirical evidence.     

Labor Income Risk and Car Insurance in the UK

Microeconomic theory shows that only under certain conditions higher background risk increases the propensity to insure against independent marketable risks. We provide empirical evidence for the case of labor income risk and car insurance in the UK. The main result is that households with higher labor income risk spend more on insurance. This finding is consistent with microeconomic theory if the utility function is of the HARA type. Moreover, we find that households spend more on insurance if they participate in the stock market.     

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.     

保险人与保险中介人之间的信息不对称问题研究

保险人与保险中介人之间由于期望效用不一致、信息资源不充分等原因导致了信息不对称,对保险人造成负面影响的是代理人隐瞒行为型信息不对称。要解决保险人与保险中介人之间的信息不对称,一方面应加强保险人与保险中介人自身的内部约束,另一方面应建立利益趋同机制和保险信用评级制度。     

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.