FRINK Linked Data Fragments server

Matches in SemOpenAlex for { <https://semopenalex.org/work/W3125655179> ?p ?o ?g. }

• W3125655179 abstract "Property-liability insurance is distributed by two different types of firms, those that distribute their product through independent agents, who represent more than one insurer,and direct writing insurers that distribute insurance through exclusive agents, who represent only one insurer. This paper analyzes the reasons for the long term coexistence of the independent agency and direct writing distribution systems. Two primary hypotheses explain the coexistence of independent and exclusive agents. The market imperfections hypothesis suggests that firms that use independent agents survive while providing essentially the same service as firms using exclusive agents because of market imperfections such as price regulation, slow diffusion of information in insurance markets, or search costs that permit inefficient firms to survive alongside efficient firms. Efficient firms are expected to earn super-normal risk-adjusted profits, while inefficient firms will earn risk-adjusted profits closer to normal levels. The product quality hypothesis suggests that higher costs of independent agents represent unobserved differences in product quality or service intensity, such as the providing of additional customer assistance with claims settlement,offering a greater variety of product choice sand reducing policyholder search costs. This hypothesis predicts normal risk-adjusted profits for both independent and exclusive agency firms. Because product quality in insurance is essentially unobserved, researchers have been unable to reach consensus on whether the market imperfections hypothesis or the product quality hypothesis is more consistent with the observed cost data. This lack of consensus leaves open the economic question of whether the market works well in solving the problem of minimizing product distribution costs and leaves unresolved the policy issue of whether marketing costs in property-liability insurance are excessive and perhaps should receive regulatory attention. The authors propose a new methodology for distinguishing between market imperfection sand product quality using frontier efficiency methods. They estimate both profit efficiency and cost efficiency for a sample of independent and exclusive agency insurers. Measuring profit efficiency helps to identify unobserved product quality differences because customers should be willing to pay extra for higher quality. This approach allows for the possibility that some firms may incur additional costs providing superior service and be compensated for these costs through higher revenues. Profit efficiency also implicitly incorporates the qualities floss control and risk management services,since insurers that more effectively control losses and manage risk should have higher average risk-adjusted profits but not necessarily lower costs than less effective insurers. The empirical results confirm that independent agency firms have higher costs on average than do direct writers. The principal finding of the study is that most of the average differential between the two groups of firms disappears in the profit function analysis. This is a robust result that holds both in the authors tables of averages and in the regression analysis and applies to both the standard and non-standard profit functions. Based on averages, the profit efficiency differential is at most one-third as large as the profit efficiency differential.Based on the regression analysis, the profit inefficiency differential is at most one-fourth as large as the cost inefficiency differential,and the profit inefficiency differential is not statistically significant in the more fully specified models that control for size,organizational form and business mix. The results provide strong support for the product quality hypothesis and do not support the market imperfections hypothesis. The higher costs of independent agents appear to be due almost entirely to the provision of higher quality services, which are compensated for by additional revenues. A significant public policy implication is that regulatory decisions should not be based on costs alone. The authors findings imply that marketing cost differentials among insurers are mostly attributable to service differentials rather than to inefficiency and therefore do not represent social costs. The profit inefficiency results show that there is room for improvement in both the independent and direct writing segments of the industry. However, facilitating competition is likely to be a more effective approach to increasing efficiency than restrictive price regulation." @default.
• W3125655179 created "2021-02-01" @default.
• W3125655179 creator A5004359442 @default.
• W3125655179 creator A5025700500 @default.
• W3125655179 creator A5057680046 @default.
• W3125655179 date "1995-03-01" @default.
• W3125655179 modified "2023-09-27" @default.
• W3125655179 title "The Coexistence of Multiple Distributions Systems for Financial Services: The Case of Property-Liability Insurance" @default.
• W3125655179 cites W1488073887 @default.
• W3125655179 cites W1514266925 @default.
• W3125655179 cites W1529998388 @default.
• W3125655179 cites W1535866388 @default.
• W3125655179 cites W1964328696 @default.
• W3125655179 cites W1966595873 @default.
• W3125655179 cites W1972027354 @default.
• W3125655179 cites W1973695731 @default.
• W3125655179 cites W1978387276 @default.
• W3125655179 cites W1984003494 @default.
• W3125655179 cites W1992821824 @default.
• W3125655179 cites W1998733805 @default.
• W3125655179 cites W2000211546 @default.
• W3125655179 cites W2022906798 @default.
• W3125655179 cites W2024488980 @default.
• W3125655179 cites W2027430789 @default.
• W3125655179 cites W2031841530 @default.
• W3125655179 cites W2037788700 @default.
• W3125655179 cites W2042768198 @default.
• W3125655179 cites W2046327335 @default.
• W3125655179 cites W2061466812 @default.
• W3125655179 cites W2070856034 @default.
• W3125655179 cites W2077290268 @default.
• W3125655179 cites W2082475877 @default.
• W3125655179 cites W2113472471 @default.
• W3125655179 cites W2117455041 @default.
• W3125655179 cites W2152618379 @default.
• W3125655179 cites W3122855575 @default.
• W3125655179 cites W3125898175 @default.
• W3125655179 cites W2053206174 @default.
• W3125655179 hasPublicationYear "1995" @default.
• W3125655179 type Work @default.
• W3125655179 sameAs 3125655179 @default.
• W3125655179 citedByCount "10" @default.
• W3125655179 countsByYear W31256551792015 @default.
• W3125655179 crossrefType "posted-content" @default.
• W3125655179 hasAuthorship W3125655179A5004359442 @default.
• W3125655179 hasAuthorship W3125655179A5025700500 @default.
• W3125655179 hasAuthorship W3125655179A5057680046 @default.
• W3125655179 hasConcept C10138342 @default.
• W3125655179 hasConcept C108170787 @default.
• W3125655179 hasConcept C111472728 @default.
• W3125655179 hasConcept C115672447 @default.
• W3125655179 hasConcept C120757647 @default.
• W3125655179 hasConcept C138885662 @default.
• W3125655179 hasConcept C141570072 @default.
• W3125655179 hasConcept C144133560 @default.
• W3125655179 hasConcept C145097563 @default.
• W3125655179 hasConcept C162118730 @default.
• W3125655179 hasConcept C162324750 @default.
• W3125655179 hasConcept C162853370 @default.
• W3125655179 hasConcept C175444787 @default.
• W3125655179 hasConcept C2524010 @default.
• W3125655179 hasConcept C2777063073 @default.
• W3125655179 hasConcept C2777834853 @default.
• W3125655179 hasConcept C2779530757 @default.
• W3125655179 hasConcept C2780202544 @default.
• W3125655179 hasConcept C2780378061 @default.
• W3125655179 hasConcept C29122968 @default.
• W3125655179 hasConcept C33923547 @default.
• W3125655179 hasConcept C36673458 @default.
• W3125655179 hasConcept C39389867 @default.
• W3125655179 hasConcept C68799949 @default.
• W3125655179 hasConcept C90673727 @default.
• W3125655179 hasConceptScore W3125655179C10138342 @default.
• W3125655179 hasConceptScore W3125655179C108170787 @default.
• W3125655179 hasConceptScore W3125655179C111472728 @default.
• W3125655179 hasConceptScore W3125655179C115672447 @default.
• W3125655179 hasConceptScore W3125655179C120757647 @default.
• W3125655179 hasConceptScore W3125655179C138885662 @default.
• W3125655179 hasConceptScore W3125655179C141570072 @default.
• W3125655179 hasConceptScore W3125655179C144133560 @default.
• W3125655179 hasConceptScore W3125655179C145097563 @default.
• W3125655179 hasConceptScore W3125655179C162118730 @default.
• W3125655179 hasConceptScore W3125655179C162324750 @default.
• W3125655179 hasConceptScore W3125655179C162853370 @default.
• W3125655179 hasConceptScore W3125655179C175444787 @default.
• W3125655179 hasConceptScore W3125655179C2524010 @default.
• W3125655179 hasConceptScore W3125655179C2777063073 @default.
• W3125655179 hasConceptScore W3125655179C2777834853 @default.
• W3125655179 hasConceptScore W3125655179C2779530757 @default.
• W3125655179 hasConceptScore W3125655179C2780202544 @default.
• W3125655179 hasConceptScore W3125655179C2780378061 @default.
• W3125655179 hasConceptScore W3125655179C29122968 @default.
• W3125655179 hasConceptScore W3125655179C33923547 @default.
• W3125655179 hasConceptScore W3125655179C36673458 @default.
• W3125655179 hasConceptScore W3125655179C39389867 @default.
• W3125655179 hasConceptScore W3125655179C68799949 @default.
• W3125655179 hasConceptScore W3125655179C90673727 @default.
• W3125655179 hasLocation W31256551791 @default.
• W3125655179 hasOpenAccess W3125655179 @default.
• W3125655179 hasPrimaryLocation W31256551791 @default.

• next