commercial brokers and independent brokers may operate as intermediaries in the

Commercial brokers and independent brokers may

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commercial brokers and independent brokers may operate as intermediaries in the market and provide access to products of several insurance firms. The factor of insurance type usually strongly influences the choice of a distribution channel. For example, auto and homeowners insurances are mostly sold through direct writers. Direct writers are responsible for 74% of sales in these fields (Insurance Information Institute, 2015). In turn, the distribution channel of independent agents has occupied the niche of commercial sales. Finally, online sales are very popular in the sector of auto insurances. According to the information provided by the Insurance Information Institute (2015), almost 3.1 million insurance policies were bought in 2012 through online distribution channel. The table below represents the
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ALLSTATE INSURANCE CORPORATION CASE ANALYSIS 5 sales of individual annuities generated by different distribution channels in 2010 and in 2014. Surprisingly, we can see that, in this specific case, there are no evident changes in distribution channels. Size of the Industry The extraordinary size of the insurance industry in the United States is not a surprise based on the demand for insurance because of regulatory and human factors discussed previously. According to the recent data, the United States insurance market is currently the largest insurance market in the world. After a slight drop during the world financial crisis, the industry started to grow rapidly and exceeded the mark of $1.1 trillion annual revenue in 2014 (Insurance Information Institute, 2015). The trend of increasing industry’s size is obvious. A brief review of the income statements allow us to deduce that the industry has been gradually growing for last seven years. A potential of the target market has not been exhausted yet. There is enough room for implementing new marketing mechanisms and even introducing new types of insurance which are currently unfamiliar for the customers of the United States. Geographic Location of the Industry Naturally, the insurance industry in which Allstate Insurance operates in is geographically located in the United States of America. Researching the specific regions and cities to determine the insurance policies offerings that are especially popular among a particular population is difficult. Specific insurance policy information is not shared by Allstate Insurance so it is not possible to state that there are some geographic factors that significantly influence insurance industry in the United States. To further convolute the statistical data is the fact that many of the
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ALLSTATE INSURANCE CORPORATION CASE ANALYSIS 6 insurance policies can be bought online, without any personal interaction with an agent at all. Thus, the importance of geographic location is irrelevant in the chosen industry.
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