It's about building a book of business: incentives of...

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Articles Articles It's about building a book of business: incentives of insurance salespersons - Berry-Stölzle, Thomas R.

Collection: Articles

Title: It's about building a book of business: incentives of insurance salespersons / Thomas R. Berry-Stölzle, David L. EckIes

Notes: Sumario: Most property-liability insurance contracts are short-term contracts which can be renewed at expiration. With an average policy renewal rate of 89%, selling a policy not only generales immediate revenue but also results in expected future revenue for an agency. Outside employment options give salespersons negotiating power to claim a fraction of their increased production. This link between current performance and future compensation creates implícit incentives. Our empirical analysis documents a strong positive relationship between the fraction of renewals and salespersons' output, and between output and salespersons' compensation. These results hoid regardless of whether salespersons receive a fixed salary, a combination of salary and commission, or compensation entirely based on conimission. Overali, these findings support the view that property-liability insurance salespersons have strong incentives to build a book of business, and that these indirect sales incentives allow insurance agencies to offer compensation schemes with a fixed salary component.

Other authors: EckIes, David L. Icono con lupa

Other categories: 32

Derechos: In Copyright (InC): http://rightsstatements.org/vocab/InC/1.0/

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