On the Choice of Insurance Distribution Systems
AbstractWe examine insurers' choice between independent and exclusive agents. We assume that alternative distribution systems are efficient mechanisms for controlling contracting problems among policyholders, insurers, and agents. Because the use of independent agents helps control potential expropriative behavior by the insurer, the independent agency system should be more valuable for ownership structures where such problems are more severe. Thus, ownership structures and distribution systems are strategic compliments. We test this theory by analyzing the association between distribution-system choice and the firm's ownership structure, lines of insurance, advertising policy, size, geographic concentration, and cost structure among property-casualty insurers.
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Bibliographic InfoPaper provided by The A. Gary Anderson Graduate School of Management. University of California Riverside in its series The A. Gary Anderson Graduate School of Management with number 96-15.
Length: 27 pages
Date of creation: 1996
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Postal: The A. Gary Anderson Graduate School of Management. University of California, Riverside. Riverside CA 92521
Web page: http://www.agsm.ucr.edu/
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INSURANCE ; CONTRACTS;
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