Abstract
The cost of life distribution varies considerably across markets and channels. This is increasingly important for insurers and regulators due to the continuing low interest rate environment in Europe, which strongly affects profits. The aim of this paper is to study the distribution costs of different distribution systems/channels and markets, examine the key drivers of distribution costs and discuss future developments against the background of digitalisation and an increasing intensity of intermediary regulation. Our analysis is based on empirical data for the European insurance market. This is complemented by interviews with several industry experts. Our findings suggest that distribution costs depend on various factors and cannot be explained solely by differences in distribution channel strategies.
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