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The Quality of Insurance Intermediary Services – Empirical Evidence for Germany

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  • Eckardt, Martina
  • Räthke-Döppner, Solvig

Abstract

Insurance intermediaries help consumers to economize on information and transaction costs in insurance markets. However, competing insurance intermediaries provide heterogeneous services, which are difficult to assess by incompletely informed consumers. Transaction costs economics, search theory and principal agent theory provide arguments on product quality differences between the two main distribution channels in insurance markets (exclusive agents vs. independent intermediaries). The present paper uses a sample of 927 insurance intermediaries in Germany. By performing OLS estimations we test the impact of the different distribution channels, but also of other factors relating to the information processing activities on intermediaries’ service quality. Depending on the proxies used for service quality, we find mixed evidence for the “product quality” hypothesis according to which independent intermediaries provide better service quality than exclusive agents. We find that service quality depends also to a large extent on the information gathering and processing activities of the individual intermediaries.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 10703.

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Date of creation: Sep 2008
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Handle: RePEc:pra:mprapa:10703

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Keywords: Insurance Distribution Channels; Service Quality;

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References

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Citations

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Cited by:
  1. Richard Brophy, 2012. "Development of insurance regulation in Ireland," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 20(3), pages 248-263, July.
  2. Dan Constantin Danuletiu & Adina Elena Danuletiu, 2011. "Trends And Challenges Of Romanian Brokerage Insurance Market," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(13), pages 24.
  3. Tajudeen Olalekan Yusuf, 2011. "Brokers' incentives and conflicts of interest in the control of opportunism," Journal of Risk Finance, Emerald Group Publishing, vol. 11(3), pages 168-181, May.

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