Compensation and Industry Profitability

Download or read book Compensation and Industry Profitability written by Anne Gron and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This article provides an empirical investigation of a multiple principal -- multiple agent relationship under changing industry conditions. Using 34 years of biannual data, it investigates the relationship between property-casualty insurers and agents representing multiple insurers. Several facts emerge. Average commission rates and the number of insurers represented are lower when insurers have higher profitability. Agency income is not systematically related to insurer profitability. Competition from alternative distribution systems and technological innovation have reduced commission rates. Larger agencies have lower average commission rates. These facts are interpreted in light of industry history and economic theory and suggest areas for further research.