| dc.description.abstract | With the advent of the era of financial holdings in Taiwan, financial institutions’ cross-marketing of their non-core financial products has increasingly grown in popularity. In recent years, because of the increasing financial consumption disputes arising from the sales of financial products, the relevant authorities have put more stress on protection measures of consumers and investors, as well as on equity protection. The number of insurance brokerage firms has grown continuously, and their market share has also gradually risen accordingly over the last decade. To compound matters, non-compensation claim rates of insurance policies have also risen. To protect consumers’ rights and interests, insurance brokers are directed to follow statutory laws and regulations strictly in operating their businesses. In order to ensure insurance brokers’ protection of the insured’s benefits as regulated in the Insurance Act, the competent authorities in charge of insurance matters at the Insurance Bureau of Financial Supervisory Commission have therefore revised the insurance broker management regulations and proposed to the Legislative Yuan to revise the regulations related to insurance broker management in the Insurance Act.
Following 20 years of development, there are currently about 450 insurance brokerage firms in the local market. However, these firms have developed according to different models, so their business scales vary widely. The statistics released from the Insurance Brokerage Association of Taiwan for 2007 show that the top 5% of the larger scale insurance brokerage firms accounted for 86% of the total business volume, whereas the remaining 376 insurance brokerage firms only took a 14% share. Since a majority of the firms are small scaled, the insurance broker management regulations enacted in 2011 will significantly impact their business.
To meet the changing regulations, the majority of insurance brokerage firms have to adjust their operating strategies. This study found that it is essential for insurance brokerage firms to pursue large-scale operation. If they have difficulty in carrying out a large-scale operating model, they should change their operating direction to a focus operating model. By exploring how insurance brokerage firms can merge to attain an expected operating scale, the study puts forth the following three conclusions for guiding the future development of insurance brokerage firms.
(1) Mergers between insurance brokerage firms, with which a company with a larger scale acquires a comparatively smaller one.
(2) Mergers between medium and small scale insurance brokerage firms, which results in reduction of the number of contract-selling insurance firms, and transformation of insurance companies to focus on business cooperation among insurance agencies.
(3) Strategic alliance between medium and small scale insurance brokerage firms, which leads to reduction of the business scale of these firms and transformation of the firms into insurance broker offices.
| en_US |