Insurance Marketing Systems: Agency, Non-Agency, Direct
Insurance Marketing Systems
Types of Marketing Systems:
- Agency Building System: A system where an insurer builds its own agency by recruiting, financing, training, and supervising new agents.
- New agents represent the insurer.
- Types:
- General Agency System: The general agent is an independent contractor representing only one insurer.
– In charge of a territory and responsible for recruiting, training, and motivating new agents.
– Receives a commission based on the amount of business produced.
Managerial System: Branch offices are established in various areas.
– The branch manager is an employee of the company responsible for hiring and training new agents.
– The manager is paid a salary and commission based on the volume and quality of insurance sold and the number of productive agents hired.
– The company pays the expenses of the branch office, including financing new agents.
Non-Building Agency System: A marketing system where an insurer sells its products through established agents already selling life insurance.
– An insurer contracts with successful agents who agree to sell the insurer’s products.
Example: Personal Producing General Agent: A successful agent hired primarily to sell insurance under a contract providing both direct and overriding commissions.
– An above-average salesperson with a proven sales record.
– Hired to sell insurance, not to recruit and train new agents.
Direct Response System: A marketing system where life and health insurance is sold directly to consumers without an agent.
Potential customers are solicited through television, radio, mail, newspapers, and other media. Some insurers use telemarketing and websites to sell directly to customers.
Advantages:
- Access to large markets
- Low acquisition costs
- Uncomplicated products can be sold effectively
Disadvantage:
- Complex products are difficult to sell because an agent’s services may be required.
Insurance Marketing Systems
Types of Marketing Systems:
- Agency Building System: A system where an insurer builds its own agency by recruiting, financing, training, and supervising new agents.
- New agents represent the insurer.
- Types:
- General Agency System: The general agent is an independent contractor representing only one insurer.
– In charge of a territory and responsible for recruiting, training, and motivating new agents.
– Receives a commission based on the amount of business produced.
Managerial System: Branch offices are established in various areas.
– The branch manager is an employee of the company responsible for hiring and training new agents.
– The manager is paid a salary and commission based on the volume and quality of insurance sold and the number of productive agents hired.
– The company pays the expenses of the branch office, including financing new agents.
Non-Building Agency System: A marketing system where an insurer sells its products through established agents already selling life insurance.
– An insurer contracts with successful agents who agree to sell the insurer’s products.
Example: Personal Producing General Agent: A successful agent hired primarily to sell insurance under a contract providing both direct and overriding commissions.
– An above-average salesperson with a proven sales record.
– Hired to sell insurance, not to recruit and train new agents.
Direct Response System: A marketing system where life and health insurance is sold directly to consumers without an agent.
Potential customers are solicited through television, radio, mail, newspapers, and other media. Some insurers use telemarketing and websites to sell directly to customers.
Advantages:
- Access to large markets
- Low acquisition costs
- Uncomplicated products can be sold effectively
Disadvantage:
- Complex products are difficult to sell because an agent’s services may be required.