home
become a member
annual meetings
journal of insurance issues
past presidents
about WRIA
university RMI programs
announcements
bylaws
 
 

TITLE
"The Distribution of Property/Liability Insurance in Canada: Costs and Market Structure," Journal of Insurance Issues, Mary Kelly and Anne Kleffner, Spring 2006, Vol. 29, No. 1, pp. 51-70. Full-text articles soon will be available through ABI/INFORM and EBSCO; click here for article PDF

ABSTRACT
Studies in the U.S. show that insurers that operate as exclusive writers have
lower expense ratios than agency writers. In addition, exclusive and commodity
writers dominate personal lines of insurance and agency writers dominate commercial
lines. In contrast, Canadian agency writers dominate both personal and commercial
lines. Furthermore, in Canada, a firm’s distribution method does not affect its relative
expenses. We conjecture that the higher fixed costs faced by exclusive and commodity
writers in Canada counterbalance the lower variable costs faced by these firms. The
lack of dominance in personal lines by Canadian exclusive writers is a rational response
to the smaller market size in Canada and the higher level of government intervention.

Key words: Distribution methods and costs, Canada and United States, property/
liability insurance.