We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Independent and Exclusive Agency Insurers: A Reexamination of the Cost Differential.
- Authors
Barrese, James; Nelson, Jack M.
- Abstract
Using 1967 data, Joskow (1973) found the independent agency system relatively inefficient for marketing insurance. Cummins and VanDerhei (1979) extended the study through 1976 and confirmed Joskow's findings. However, they found a smaller cost differential using total expenses rather than underwriting expenses alone. The current study extends the investigation through 1990, links the empirical evidence with the logic of agency theory, and provides an alternative measurement of marketing methods. The existence of a cost differential is reaffirmed, and the alternate marketing specification shows that exclusive agency firms have lower expenses than independent agency firms but that direct mail merchandisers have lower expenses than either type of agency firm. The estimated cost differentials are insignificant in some years when losses are used as a proxy for output.
- Subjects
INSURANCE companies; INSURANCE marketing; MARKETING; INSURANCE; THEORY; LOGIC; AGENCY theory; ECONOMIC forecasting; MANAGEMENT
- Publication
Journal of Risk & Insurance, 1992, Vol 59, Issue 3, p375
- ISSN
0022-4367
- Publication type
Article
- DOI
10.2307/253052