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The Quality of Insurance Intermediary Services—Empirical Evidence for Germany

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  • Martina Eckardt
  • Solvig Räthke‐Döppner

Abstract

Competing insurance intermediaries provide heterogeneous services that are difficult for incompletely informed consumers to assess. Transaction cost economics, search theory, and principal‐agent theory provide arguments on product quality differences between exclusive agents and independent intermediaries. This article uses a sample of 927 insurance intermediaries in Germany. By performing OLS estimations, we test the impact of the different distribution channels and other factors on intermediaries’ service quality. Depending on the proxies used for service quality, we find mixed evidence for the product quality hypothesis. Service quality depends to a large extent on the information‐gathering and processing activities of the individual intermediaries, independent of the respective distribution channel.

Suggested Citation

  • Martina Eckardt & Solvig Räthke‐Döppner, 2010. "The Quality of Insurance Intermediary Services—Empirical Evidence for Germany," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 77(3), pages 667-701, September.
    • Handle: RePEc:bla:jrinsu:v:77:y:2010:i:3:p:667-701
    DOI: 10.1111/j.1539-6975.2010.01361.x
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    3. Lex, Christoph & Tennyson, Sharon, 2021. "EU intermediary regulation and its impact on insurance agent quality: Evidence from Germany," International Review of Law and Economics, Elsevier, vol. 68(C).
    4. Marcus C. Christiansen & Martin Eling & Jan-Philipp Schmidt & Lorenz Zirkelbach, 2016. "Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 83(2), pages 269-300, June.
    5. Dominique-Ferreira, Sérgio, 2017. "How important is the strategic order of product attribute presentation in the non-life insurance market?," Journal of Retailing and Consumer Services, Elsevier, vol. 34(C), pages 138-144.
    6. Tajudeen Olalekan Yusuf, 2011. "Brokers' incentives and conflicts of interest in the control of opportunism," Journal of Risk Finance, Emerald Group Publishing, vol. 12(3), pages 168-181, May.
    7. Dionne, Georges & Harrington, Scott, 2017. "Insurance and Insurance Markets," Working Papers 17-2, HEC Montreal, Canada Research Chair in Risk Management.
    8. Lu-Ming Tseng & Yue-Min Kang, 2014. "The influences of sales compensations, management stringency and ethical evaluations on product recommendations made by insurance brokers," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 22(1), pages 26-42, February.
    9. Lukas Stricker & Joël Wagner & Angela Zeier Röschmann, 2023. "The Future of Insurance Intermediation in the Age of the Digital Platform Economy," JRFM, MDPI, vol. 16(9), pages 1-32, August.
    10. Richard Brophy, 2012. "Development of insurance regulation in Ireland," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 20(3), pages 248-263, July.
    11. Benjamin L. Collier & Marc A. Ragin, 2020. "The Influence of Sellers on Contract Choice: Evidence from Flood Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 87(2), pages 523-557, June.
    12. Thomas Köhne & Christoph Brömmelmeyer, 2018. "The New Insurance Distribution Regulation in the EU—A Critical Assessment from a Legal and Economic Perspective," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 43(4), pages 704-739, October.
    13. Dan Constantin Dănuleţiu & Adina Elena Dănuleţiu, 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 1-24.
    14. Thomas Köhne & Marija Köhne, 2024. "Uncovering the Impact of Digitalization on the Performance of Insurance Distribution," Risks, MDPI, vol. 12(8), pages 1-30, August.
    15. Agarwal, Sumit & Kuang, Weida & Wang, Long & Yang, Yang, 2024. "The role of agents in fraudulent activities: Evidence from the housing market in Beijing," Journal of Urban Economics, Elsevier, vol. 142(C).
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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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