1. Finance 431 Risk Management and Insurance – Property Casualty Insurance Brokerage

2. RMI-Insurance Brokerage Our agenda today –Review insurance distribution –A group project in class –The brokerage business Background Current events Thoughts for the future

3. RMI-Distribution Review of distribution in the insurance industry –Independent agents and brokers –Exclusive agencies/captive agencies –Direct marketing sales

4. RMI-Distribution Insurance distribution –Some stats How many producers in the U.S. Is it changing –Personal lines v property casualty Agents Brokers

5. RMI Insurance distribution –Agent v broker The distinction Real v theoretical –What do customers think Agent v broker –What do companies think Agent v broker

6. RMI –Insurance Brokerage In class problem set

7. RMI-Insurance Brokerage Who are Insurance brokers –There are national and regional firms –Names in the news Marsh AON Willis May others large and small

8. RMI-Insurance Brokerage What is the role of an insurance intermediary –Traditional –Changing role of the intermediary Responding to changing customer needs Value added services

9. RMI-Insurance Brokerage How are insurance intermediaries compensated Who pays for all this –Commissions –Fees –Special arrangements Customers Insurance companies

10. RMI-Insurance Brokerage Current events-what is all the fuss about –Review of what’s been happening Investigations of insurance industry practices Investigation of “ bad guys”

11. RMI-Insurance Brokerage Transparency and disclosure –What’s important Cost v benefit –Industry response CIAB RIMS NAIC Financial Services –Sarbanes-Oxley –GLB

12. RMI-Insurance Brokerage How are agents and brokers regulated –State regulation –Financial services modernization

13. RMI-Insurance Brokerage Some thoughts on changes in the industry –Products and services –Distribution channels –Intermediaries –The economics

14. RMI-Insurance Brokerage Questions Next class