Risk%20Management%20and%20Insurance - PowerPoint PPT Presentation

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Risk%20Management%20and%20Insurance

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Overview of marketing and distribution related to insurance industry ... Managing general agents. Excess and surplus lines brokers. Marketing and Distribution ... – PowerPoint PPT presentation

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Title: Risk%20Management%20and%20Insurance


1
Risk Management and Insurance
  • Finance 431 Property Casualty
    Insurance
  • Marketing and Distribution

2
Marketing and Distribution
  • Goals of our discussion
  • Overview of marketing and distribution related to
    insurance industry
  • Discuss some alternatives to traditional
    marketing and distribution of products and
    services
  • Career opportunities

3
Marketing and Distribution
  • Types of private insurers
  • A quick review
  • Stock companies
  • Mutual companies
  • Reciprocal exchanges
  • Lloyds organizations

4
Marketing and Distribution
  • How do you market and distribute products and
    services
  • What are some considerations in thinking about
    how companies access customers
  • Whats different about insurance

5
Marketing and Distribution
  • Considerations of a marketing and distribution
    system or strategy
  • Type of product or service
  • New v mature
  • Size of geographic area
  • Who are your customers
  • Sales force

6
Marketing and Distribution
  • Write down what you may know from your own
    experiences about what a traditional marketing
    system may be for insurance . get to know a
    neighbor

7
Marketing and Distribution
  • Traditional marketing systems
  • Independent agents and brokers
  • Exclusive agency system
  • Direct writers
  • Direct response writer
  • Multiple distribution system

8
Marketing and Distribution
  • In class discussion questions
  • Work with your neighbors

9
Marketing and Distribution
  • Independent agency and brokerage system
  • Independent agents and brokers
  • National and regional brokers
  • Independent agent networks
  • Managing general agents
  • Excess and surplus lines brokers

10
Marketing and Distribution
  • Agent v broker
  • Legal v real differences
  • Agents
  • Brokers

11
Marketing and Distribution
  • What do the various types of independent agents
    and brokers have in common
  • Represents several companies
  • Access to products and services
  • Agency owns the expiration or renewal rights
  • Compensation commission
  • Varies by line
  • New v renewal
  • Expenses generally paid by agency

12
Marketing and Distribution
  • Exclusive agency marketing system
  • Characteristics
  • Represent one company or group of companies
  • Generally do not own renewal rights but may vary
    with some companies
  • Compensation commission
  • New v renewal
  • Strong support from company

13
Marketing and Distribution
  • Direct writer marketing system
  • Characteristics
  • Salesperson is an employee
  • Represents only one company
  • Compensation salary plus
  • Salary plus commission
  • Salary plus bonus
  • Insurer pays all expenses

14
Marketing and Distribution
  • What do agents/brokers/producers do
  • Prospecting
  • Look for customers
  • Risk management overview
  • Initial look see
  • Submit to company
  • Sales
  • Insurance products and services

15
Marketing and Distribution
  • What do agents/brokers/producers do
  • Policy issuance
  • Varies by company and line
  • Premium billing and collection
  • Direct billing more and more common
  • Claims handling
  • Small amounts set by company
  • Varies significantly by company and line of
    business

16
Marketing and Distribution
  • What do agents/brokers/producers do
  • Customer service
  • Key most important
  • Understanding the needs of the business or
    individual
  • Consulting services
  • Customers consider agents and brokers as trusted
    advisors
  • Relationships very strong

17
Marketing and Distribution
  • Is one system better than the other
  • Independent v exclusive v direct
  • Some considerations
  • Customer base
  • Personal lines-individuals
  • Commercial lines-business

18
Marketing and Distribution
  • Some considerations continued
  • Complexity of customer needs
  • Sophistication of customer
  • Small business v national concern
  • Risk manager v no risk manager
  • Expectations of producer/agent- broker

19
Marketing and Distribution
  • Some considerations continued
  • Territorial issues
  • Metropolitan v rural
  • Pricing/cost issues
  • Customers want value added services

20
Marketing and Distribution
  • What is/are the most important consideration(s)

21
Marketing and Distribution
  • What are the requirements to be a producer in
    Illinois
  • Age
  • Educational requirements
  • Pre-exam
  • Continuing
  • Examination
  • Property Casualty
  • Life and Health
  • License fee

22
Marketing and Distribution
  • Picking an agent or broker
  • Whats important
  • Professional qualifications/experience
  • Understanding your business or personal needs
  • Relationship
  • Communication skills
  • Integrity
  • Represent you
  • Access to markets
  • You need to feel comfortable
  • Service

23
Marketing and Distribution
  • A career in Marketing
  • Company v agent or broker

24
Marketing and Distribution
  • Direct response system
  • Not very prevalent in property casualty
  • Personal v commercial
  • Heavy advertising

25
Marketing and Distribution
  • Multi distribution channels
  • What does it really mean
  • Customers are looking at alternatives
  • Customers are more sophisticated
  • Companies are testing the waters in a number of
    ways
  • Acquisition
  • Partnering
  • Alternative marketing
  • Issues
  • Barriers to success

26
Property Casualty Insurance
  • Financial Services Modernization
  • Gramm-Leach-Bliley
  • Banks and insurance companies
  • Impact on each
  • Distribution
  • Cross sell
  • Opportunities from act
  • Issues

27
Property Casualty Insurance
  • Financial Services Modernization
  • Advantages to customers
  • One Stop Shopping
  • Cost efficiency in services provided
  • Relationships

28
Property Casualty Insurance
  • Financial Services Modernization
  • Issues for banks and insurance companies
  • Consolidation efficiencies difficult
  • Returns for investors
  • Management of balance sheet different in both
  • Relationship building more complex
  • Expertise across a broad set of financial
    services very difficult to build/buy/partner and
    maintain

29
Property Casualty Insurance
  • Financial Services Modernization
  • The Travelers and Citigroup
  • Has it worked
  • Surety
  • Bonding and banking services
  • My own experience

30
Property Casualty Insurance
  • The Internet
  • Will it be an effective means to
    distribute/market insurance products ?
  • Issues
  • Positives
  • Negatives

31
Property Casualty Insurance Marketing and
Distribution
  • Summary thoughts
  • A career in Marketing
  • Many opportunities
  • As a Business Exec you need to be an informed
    buyer/a sophisticated buyer in managing this
    component of your business
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