Independent Insurance Agents: An Overview

The decline in the number of independent insurance agencies operating within the State of California is not necessarily an indication that the number of organizations and individuals engaged in the selling of insurance within the state has declined. While an absolute decline in the number of insurance marketers within the state could be associated with the decline in the number of independent insurance agencies, an alternative explanation involves a shift from independent agency to the direct marketing of insurance by underwriters. The significance of a decline in the number of independent insurance agencies operating within the state (one-fifth of the independent agencies have ceased to operate since the mid-1980s) is based on the contention that the presence of independent agents increases competitiveness in the insurance marketplace, thereby providing benefits to the insurance consumer (Society of Chartered Property and Casualty Underwriters, 1991, p. 11).

The decline in the number of independent insurance agencies within California is attributed to a variety of factors depending upon the source of the assessment. One content

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by which a firm may communicate with its customers. Together, these activities are known as a firm's marketing communications mix. These communications activities are as follows: 1. Advertising. Advertising consists of any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor. This medium of marketing communication is especially applicable to the operations of insurance underwriters. 2. Personal selling. Personal selling is any oral presentation in a conversation between a representative of a marketing organization and one or more prospective purchasers for the purpose of making sales. This medium of marketing communication is especially applicable to the activities of independent insurance agencies. 3. Sales promotion. Sales promotion involves the offer to prospective purchasers of short-term incentives to encourage a person or persons to buy a product being offered for sale. 4. Publicity. Publicity is the non personal stimulation of demand for a product achieved by planting commercially significant news about the product in a communications medium wherein such publication is not paid for by the sponsor. The marketing communication mix for a firm may be fully
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Approximate Word count = 9493
Approximate Pages = 38 (250 words per page)

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