marketing system

system that determines and directs the design, development, sale and support of a product or service.

distribution channel

method used to sell, deliver and service a product.

actual authority

authority (expressed or implied) of an agent, as conferred by the principal, under an agency contract.

apparent authority

legal concept which states that if a reasonable person would believe that an agent has certain authority conferred on him/her by the principal, without contrary action by the principal, then this authority is considered to exist.

independent agency and brokerage marketing system

independent agents and brokers are not employees of the insurer, but independent contractors. the agents (authorized to represent the insurer) and brokers (representatives of the customer) may represent multiple insurance companies.

managing general agents

typically serve as a home office for several producers. the function performed by the MGA vary by contract but often include underwriting, sales, claims admin., and risk mgmt.

excess and surplus lines brokers

work with insurers to place business with non-admitted insurers when no insurance is available in the standard market.

exclusive agency marketing system

system in which agents may represent only one insurer. the amount of authority conferred on an agent (independent contractor) and level of administrative support for that agent are governed by agency law and the agency contract

direct writer marketing system

the producer is an employee of the direct writer, not an independent contractor. ownership of expiration is usually vested in the insurer.

cold canvass (cold calling)

solicitation of business either by telephone orin perosn w/o a prior appointment

agency bill

billing system where the agent bills the customer directly. upon receipt of the premium, the agent forwards payment to the insurer, less the agent's commissions.

direct billing

function now being performed by most insurers. in this process, the customer is billed directly by the insurer, which receives the premium and forwards the commission to the agent.

alternative distribution channels

distribution channels used by an insurer other than an agency force, broker or direct writer system. there are 5 principal alternative distr. channels: internet, call centers, direct response, group marketing and financial institutions.

direct response distribution channel

markets directly to customers or porspective customers via mail, phone or internet. while this system has been used successfully for personal lines, it does not lend itself to the marketing of complex commercial accts.

affinity marketing

targets a particular group and offers insurance products to this group, usually at a discount. the members of the group are treated and preferred customers for underwriting purposes.