Insurance is delivered to consumers through a variety of distribution channels, which describe how insurance companies and producers bring products to market.
Captive Agents
- A captive agent is an insurance agent who works exclusively for one insurer or group of affiliated insurers.
- They can only sell the products of 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 meet customer needs.
- Independent producers operate as self-employed businesspeople (broker) or within an agency (agent).
- These roles are further defined in the next chapter.
