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FIN 321 Principles of Risk Management and Insurance Insurance Production. Russ Rucker, AAI, CPCU Rucker, Billups & Fowler Inc. Huntington, WV. Topics of Discussion. What is insurance production? Types of Insurance Marketing Systems What is the role of a producer? Risk Management Process

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FIN 321 Principles of Risk Management and Insurance Insurance Production

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Fin 321 principles of risk management and insurance insurance production

FIN 321Principles of Risk Management and InsuranceInsurance Production

Russ Rucker, AAI, CPCU

Rucker, Billups& Fowler Inc.

Huntington, WV


Topics of discussion

Topics of Discussion

  • What is insurance production?

  • Types of Insurance Marketing Systems

  • What is the role of a producer?

  • Risk Management Process

  • Gathering of Information-Data Sheets and Checklists

  • Case Studies


What is insurance production

What is Insurance Production?

  • Production refers to the sales and marketing activities of insurers

    • Agents are often referred to as producers

    • Life Insurers have an agency or sales department

    • Property and Liability insurers have marketing departments

  • An agent should be a competent professional with a high degree of knowledge in a particular area of insurance and who also places the needs of his or her clients first


  • Types of insurance marketing systems

    Types of Insurance Marketing Systems

    • Independent Agency- a business firm that usually represents several unrelated insurers

      • Agents are paid a commission which will vary by the line or type of insurance. The amount of business can result in additional compensation to the agent

      • Agency owns the expiration or renewal rights to the business


    Types of insurance marketing systems1

    Types of Insurance Marketing Systems

    • Exclusive Agency System- the agent represents only one insurer or group of insurers under common ownership

      • Agents do not usually own the expiration or renewal rights to the policies

      • Agents are generally paid a lower commission rate on renewal business than on new business


    Types of insurance marketing systems2

    Types of Insurance Marketing Systems

    • Direct Writer- an insurer in which the salesperson is an employee of the insurer, not an independent contractor. Employees are usually compensated on a “salary plus” arrangement


    Types of insurance marketing systems3

    Types of Insurance Marketing Systems

    • Direct Response- the insurer sells directly to the consumer by television or some other media Usually used to sell personal lines of insurance

    • Multiple Distribution Systems- some insurers use variations of all or some of the above systems


    What is the role of a producer risk management process

    What is the role of a producer?Risk Management Process

    • Identify loss exposures

    • Measure and analyze loss exposures

    • Select the appropriate combination of techniques for treating the loss exposures

    • Implement and monitor the risk management process


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