Insurance Brokers’ behaviour: the effect of policy collection on management decisions
Keywords:
Insurance Broker, Operating Performance, Collecting Premium, Risk Coverage, Deferring the Payment, Regression model, Sizes and SalesAbstract
Spanish legislation on insurance and reinsurance mediation stipulates that intermediary can only receive commissions and fees for the management of their policies and prohibits any other form of remuneration. However, it is possible that financial intermediaries who manage larger risks wait until the end of the legal deadline to settle with insurance companies. This common practice in the insurance market hides additional remuneration in defiance of the law. It also means that the risk is not covered within the prescribed period and would, involve a commercial payment to the client, and, on the other hand, affect sustainable claims management.
References
Azofra-Pelenzuela, V., Castrillo-Lara, M.J., & Vallelado, E. (1999). Marketing channels and agency problems in Spanish Insurance Industry, Paper provided at the 8th Symposium on Finance, Banking, Insurance Universität Karlsruhe (TH), Germany. December.
http://symposium.wiwi.uni-karlsruhe.de/8thabstracts/az-cava.htm.
Barber, B. M., & Lyon, J. D. (1996). Detecting abnormal operating performance: The empirical power and specification of test statistics. J. of Finan. Econ. 41(3), 359-399.https://doi.org/10.1016/0304-405X(96)84701-5
Boadi, E. K., Antwi, S., & Lartey, V. C. (2013). Determinants of profitability of insurance firms in Ghana. Int. J. of Bus. and Soc. Res. (IJBSR) 3(3), 43-50.
http://thejournalofbusiness.org/index.php/site/article/view/231/231
Boubakri, N., & Cosset, J. C. (1998). The financial and operating performance of newly privatized firms: Evidence from developing countries. The J. of Finan. 53(3), 1081-1110.
https://doi.org/10.1111/0022-1082.00044
Cummins, J., & Doherty, N. (2006). The economics of insurance intermediaries. The J. of Risk and Insur. Vol. 73. Issue 3:359-396. Pennsylvania (United States). https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1539-6975.2006.00180.x
Doman, A., Duchen, T., & Martin, M. (1999). Brokers vs. insurers. The McKinsey Quarterly, (3), 26. http://www.mckinseyquarterly.com
Eckardt, M. (2002). Agent and broker intermediaries in insurance markets-An empirical analysis of market outcomes. Thünen-Series of Applied Economic Theory, 4. http://hdl.handle.net/10419/78253
Eckardt, M. (2007). Insurance intermediation: An economic analysis of the information services market (Google eBook). Spinger.com. https://link.springer.com/book/10.1007/978-3-7908-1940-3
Greene, W. H., & Segal, D. (2004). Profitability and efficiency in the US life insurance industry. Journal of Productivity Analysis, 21(3), 229-247. https://doi.org/10.1023/B:PROD.0000022092.70204.fa
Kurland, N. B. (1996). Sales agents and clients: Ethics, incentives, and a modified theory of planned behaviour”. Human relations 49, nº1. https://journals.sagepub.com/doi/abs/10.1177/001872679604900103
Latorre M.A. (2015a). Shedding the light on insurance brokers’ remuneration: The role of the fees. Opción, Año 31, No. Especial 2, diciembre, 654-676. https://dialnet.unirioja.es/servlet/articulo?codigo=5834775
Latorre M.A. (2015b).La problemática de la gestión de cobro en una correduría de seguros. Ebook contenidos innovadores dentro de las ciencias naturales. Aplicadas y de la salud. Libro digital. (Ebook). Ed. McGraw-Hill Interamericana de España S.L. Chapter 6, pp.75-86
Latorre, M.A.; Farinos, J.E. (2015). Ethical behaviour and operating performance of insurance broker firms. J. of Int. Bus. and Econ. 3(1), 44-51. http://dx.doi.org/10.15640/ jibe.v3n1a6
Lee, H. H., & Lee, C. Y. (2012). An analysis of reinsurance and firm performance: Evidence from the Taiwan property-liability insurance industry. The Geneva Papers on Risk and Insurance-Issues and Practice 37(3), 467-484. https://link.springer.com/article/10.1057/gpp.2012.9
Malik, H. (2011). Determinants of insurance companies’ profitability: an analysis of insurance sector of Pakistan. Academic Research International, 1(3), 315.
http://www.savap.org.pk/journals/ARInt./Vol.1(3)/2011(1.3-32)stop.pdf
Marano, P. (2019). Navigating InsurTech: The digital intermediaries of insurance products and customer protection in the EU. Maastricht J. of Eur. and Comp. Law, 26(2), 294-315. https://journals.sagepub.com/doi/abs/10.1177/1023263X19830345
Merello, P., Barberá, A., & De la Poza, E. (2022). Is the sustainability profile of FinTech companies a key driver of their value?. Technological Forecasting and Social Change, 174, 121290.https://doi.org/10.1016/j.techfore.2021.121290
Nguyen, H. T., Nguyen, H., Nguyen, N. D., & Phan, A. C. (2018). Determinants of customer satisfaction and loyalty in Vietnamese life-insurance setting. Sustainability, 10(4), 1151.
https://doi.org/10.3390/su10041151
Nurse, J. R., Axon, L., Erola, A., Agrafiotis, I., Goldsmith, M., & Creese, S. (2020). The data that drives cyber insurance: A study into the underwriting and claims processes. In 2020 International Conference on Cyber Situational Awareness, Data Analytics and Assessment (CyberSA) (pp. 1-8). IEEE.
https://doi: 10.1109/CyberSA49311.2020.9139703
Official State Gazette „BOE“ no. 170, 18 July 2006 Reference: BOE-A-2006-12916. Law 26/2006 of July 17 (2006). Insurance mediation and private reinsurance. Article 29. Relations with insurers and clients pp.24
https://www.boe.es/buscar/pdf/2006/BOE-A-2006-12916-consolidado.pdf
Owusu-Sekyere, F., & Kotey, RA. (2019). Profitability of insurance brokerage firms in Ghana. Acad. J. of Econ. Stud. 5(2). https://www.ceeol.com/search/article-detail?id=779253
Pointer, L. V., & Khoi, P. D. (2019). Predictors of Return on Assets and Return on Equity for Banking and Insurance Companies on Vietnam Stock Exchange. Entrepreneurial Business and Economics Review, 7(4), 185-198. https:doi.10.15678/EBER.2019.070411
Royal Decree-Law 3/2020 of 4 February (2020) On urgent measures transposing into Spanish law various European Union directives in the field of public procurement in certain sectors; private insurance; pension plans and funds; taxation and tax litigation. Article 156. Relations with insurance entities and with clients pp. 125 https://www.boe.es/eli/es/rdl/2020/02/04/3/con
Rose, F. (1999). The economics, concept, and design of information intermediaries. Inf. Age Econ. 163-207. https://link.springer.com/chapter/10.1007/978-3-642-99805-8_5
Tseng, L. M.; Kang, Y. M. (2014). The influences of sales compensations, management stringency and ethical evaluations on product recommendations made by insurance brokers. Journal of Financial Regulation and Compliance, 22(1), 26-42.
Downloads
Published
Issue
Section
License
All articles are published under an Attribution-NoDerivatives 4.0 International (CC BY-ND 4.0) license. Authors retain copyright over their work.
