Collective Merchandising of Automobile Insurance

Abstract

The purpose of this paper is to report on recent developments in the collective merchandising of automobile insurance. It includes information gathered by the author from published materials, by interviews with insurer and labor union officials, and by a mail survey of insurance buyers and personnel officials of large employers. The plans sponsored by the Teamsters Union and the Michigan Credit Union League are discussed in detail because of their importance in the evolution of this marketing technique. One of the most controversial recent developments in the marketing of property and liability insurance is the trend toward the cooperative purchase of insurance by organized consumers. The motive for this cooperative action is the desire to purchase insurance on terms that are more favorable than those available to the consumers individually. These more favorable terms may include lower price, more convenient premium payment terms, better protection, more lenient underwriting selection, or some combination of these factors. The movement has achieved its greatest development up to! this time in the commercial lines of insurance. However, the greatest controversy surrounds the embryonic developments in the personal lines field, especially automobile insurance. Christopher Marlowe, the great Elizabethan poet and playwright referred to Bernard L. Webb, M.S., C.P.C.U., F.C.A.S., is Assistant Professor of Actuarial Science and Insurance at Georgia State College. Professor Webb has served as Consultant to the Subcommittee on Antitrust and Monopoly of the Committee on the Judiciary of the United States Senate. This paper was presented at the A.R.I.A., 1968 Annual Meeting. Helen of Troy as, the face that launch'd a thousand ships . One might paraphrase that famous line by saying that this new development in insurance marketing is the cause that launched ten million words. Most of those words were as hostile as Helen's thousand ships that attacked and laid waste the mighty for-