Insurance distribution channels

Insurance reaches consumers through a variety of distribution channels. A distribution channel describes how insurance companies and producers bring insurance products to market.

Captive agents

• A captive agent is an insurance agent who works exclusively for one insurer or a group of affiliated insurers.
• They can only sell the products offered by their employer.

Example: An agent who works solely for State Farm and can only offer State Farm products.

Direct writers

• A direct writer is an insurer that uses its own employees to sell and service insurance policies.
• These employees are not independent agents.
• Direct writers do not rely on outside agencies or brokers.

Example: GEICO employs staff who sell policies directly to customers by phone or online.

Independent producers (agents/brokers/solicitors)

• An independent producer may represent multiple insurance companies.
• They can offer a wider variety of products to match customer needs.
• Independent producers may be self-employed businesspeople (brokers) or work within an agency (agents).
• These roles are further defined in the next chapter.