The essential features of the following categories of coverage are as follows:
Stock insurers: It is owned by the stockholders, offers some profit to the stockholders, has nonparticipating policies, have low rates, and majority of the shareholders have control of the company
Mutual insurers: Those who own policies have the power to elect the board of directors to conduct effective management. The policyholders stand a chance to receive rate or dividends reductions. The members have the right to return excess premiums
Loyd’s of London: The members who are new have legal liability, but it is limited. The members have to meet financial needs which are always stringent. Only specific or limited people within the jurisdictions are allowed to have Lloyd license
Reciprocal exchange: Insurance is exchanged within members who are known as subscribers. The integral members have the power to ensure other members. The reciprocals are limited in number because of the insurance limited lines (Hardy and Huebner,1919)
Agent is an individual who has the power to represent in a legal way the principal and have got the authority to act on behalf of the principal. On the other hand, a broker is a person who can legally represent an insured person but on a commission basis which they receive from the insurers even though they do not have any power to bind the insurer (Hardy and Huebner,1919)
The key features of the following distribution systems in the marketing of property and casualty insurance.
The agency owns the policy expirations or the renewal rights to the business under the independent agency system while under the exclusive system the agent owns the policy expirations.
The number of life insurers has declined sharply during the past decade because of the increase in company mergers and acquisitions, demutualization of insurers, and formation of mutual holding companies.
Hardy, E. R., Huebner, S. S., Michelbacher, G. F., & Mudgett, B. D. (1919). Insurance. New York: Alexander Hamilton Institute.