Contingent Commissions, Insurance Intermediaries, and Insurer Performance

21 Pages Posted: 4 Mar 2014

See all articles by Yu-Luen Ma

Yu-Luen Ma

Illinois State University - Katie Insurance School

Nat Pope

Illinois State University

Xiaoying Xie

California State University, Fullerton

Date Written: Spring 2014

Abstract

This research investigates the relationship shared by contingent commission usage and insurer performance. We assess performance using both frontier efficiency and financial performance measures. Our findings reveal that the relationship is complex and varies across differing insurer business models. We find that nonusers of contingent commissions are more cost and revenue efficient than are users of contingents. However, among insurers that use contingents, relatively higher levels of use are associated with more efficient operations and also better financial performance. Additionally, these findings are conditioned on the type of distribution system the insurer employs.

Suggested Citation

Ma, Yu-Luen and Pope, Nat and Xie, Xiaoying, Contingent Commissions, Insurance Intermediaries, and Insurer Performance (Spring 2014). Risk Management and Insurance Review, Vol. 17, Issue 1, pp. 61-81, 2014, Available at SSRN: https://ssrn.com/abstract=2404158 or http://dx.doi.org/10.1111/rmir.12004

Yu-Luen Ma (Contact Author)

Illinois State University - Katie Insurance School ( email )

Normal, IL 61790
United States

Nat Pope

Illinois State University ( email )

Normal, IL 61761
United States

Xiaoying Xie

California State University, Fullerton ( email )

800 N State College St
Fullerton, CA 92831
United States

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