The relative cost effectiveness of distribution channels used in the property and liability insurance industry was determined through multiple regression analysis. Study results suggest that a step function exists which describes the relative costliness of the various distribution systems. In the current study, the highest cost system appeared to be the independent agency system, followed by the exclusive agency system. Next was the salaried employee system, and finally the mail order system.

The property and liability insurance industry's distribution channels have varying cost effectiveness, with independent agencies being the most expensive, followed by exclusive agencies, salaried employees, and mail order systems.

Cost Effectiveness of Marketing Channels Used by the Property and Liability Insurance Industry

Key Takeaway: The property and liability insurance industry's distribution channels have varying cost effectiveness, with independent agencies being the most expensive, followed by exclusive agencies, salaried employees, and mail order systems.