Life insurance agents focus on selling policies. The company expects little follow-up in terms of providing ongoing customer service. In contrast, auto insurance agents often are expected to provide ongoing customer assistance after a policy is sold (answering questions about the policy, providing assistance in filing claims, and so on).
Some insurance companies use independent agents to sell their policies. These agents are paid solely on commission and are often allowed to sell the products of other companies (the agent presents the customer with a choice of plans across multiple companies). Other insurance companies hire their own agents. These employees are restricted from selling other companies’ products and are sometimes paid a salary in addition to any commission they might receive.
1. Which type of insurance company, life or auto, is more likely to use the in-house agent? Explain.
2. Some auto insurance companies separate the tasks of selling and customer service and assign them to different people. Why do you think they do this?
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