1.1 Motivation and Objectives
The financial industry has been navigating through a perfect storm (Reinhart, Rogoff 2008; Haas, van Lelyveld 2014). It faced the burst of the tech bubble at the beginning of the century, the financial crises at the end of the decade, and is still affected by the current sovereign debt and European currency crisis. Yet the insurance sector has mastered the associated challenges fairly well. Most major insurers have managed to deliver solid performance and valuations over the last years1. The same is true for insurance intermediaries. Despite repeatedly being declared a dying channel, insurance intermediaries are and have remained very much alive as the central distribution format in Europe as well as North America (Surminski 2002, 2003; McGranahan 2013).
However, the insurance intermediary business model has experienced numerous shifts from different directions. These include increased macro-economic challenges such as low interest rates, more stringent regulation, digitization as well as changing customer behaviour towards higher price sensitivity and use of multiple sales channels (Cummins, Rubio-Misas 2006; Cummins, Doherty 2006; McGranahan, Catlin 2011). The accumulation of these developments has intensified competitive density, led to margin reductions, and put pressure on insurers and intermediaries to seek ways to reduce costs and improve efficiency (Shim 2007, 2011). Else fulfilling the ever increased capital market expectations would not have been achieved.
In the long term, this uncertain mix of developments might affect all parts of the insurance intermediary value chain – on the economic...
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