Best’s Special Report: Effective Advertising Helps U.S. Property/Casualty Insurers Stand Out From the Crowd
The Best’s Special Report, titled, “Effective Advertising and Controlled Acquisition Costs Provide Insurers a Competitive Advantage,” states that as average rates for most lines of business decline, companies that prove expert at risk selection and pricing have a better chance of generating underwriting profits and growing their portfolios. To grow those portfolios, direct writers rely on advertising to generate the majority of their business.
Companies using independent agencies as their main distribution channel have posted superior underwriting results over the last five years, compared with those using brokers, direct writers and exclusive agents. Conversely, the median expense ratios of the direct writers are between six and 10 percentage points lower than those of companies writing mainly through the other distribution channels.
Strategic, targeted television and print advertising, as well as high profile sport-related sponsorships, have had a positive impact on companies’ bottom lines; however, effective advertising does not necessarily track with scale. Middle market and smaller insurers also can benefit from well-thought-out, well-executed marketing and advertising plans, even on a local or regional basis.
To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=266387.
Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171003006312/en/
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