Marketing Insurance on the Web

Paper Summary:

This paper examines how insurance companies market themselves and their services via the internet. The paper begins with an overview of the insurance industry and how it presently markets itself and then explores how the industry presently utilizes the internet -- for marketing, rather than for commerce. It also looks at the technology requirements, privacy issues and regulatory roadblocks that currently stand in the way of full-scale Internet commerce and concludes with the author's assertion that the market will eventually bring about Internet commerce, which will radically alter the current face of insurance sales.

From the Paper:

"Insurance companies are breaking into three main categories in terms of their marketing methodologies: direct companies, agent companies, and mixed companies. For direct companies, they have headquarters and branch offices. The sales staffs are salaried employees. Thus, direct companies do not have to pay the commissions as high as that of agent companies. However, the down side of the direct companies is that up keeping the sales staffs and the branch offices loads burden on their operation expenses. For agent companies, the headquarters and a few branches will be processing all business that the agents bring in. The agents may be captive agents, who sell only one insurance company's product, or free agents who sell multiple insurance products for many insurance companies. The agents receive commissions for the business they acquire, not salaries from the insurance companies. The agent insurance companies are able to expand their market shares through the agents without having to maintain many branch offices and sales staffs. However, they have to pay a larger portion of the insurance premium as commissions to the agents. For mixed companies, it has both features of the direct companies and the agent companies."

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