If you decide to quit or worse, your contract gets terminated, youll likely discover a ton of restrictions that prevent you from contacting previous clients. They have a wide variety of access to multiple company's insurance products. Thinking of starting or buying an insurance agency? Independent agents can offer dozens of carrier and rate options saving you time and money. Captive agents will also likely have more knowledge of discounts offered by their carrier, particularly discounts on bundled policies. Inshura is fully integrated with the ACA marketplace and private carriers. The truth is probably somewhere in between. Plus, chances are you wont receive anything like renewal income. However, as a business owner, it is important to know the difference between the types of insurance professionals in order to make an informed decision about the insurance agent you choose to work with. Captive Agents vs. The capacity to offer your clientscompetitive quotes across multiple carriers. If you're of the first set, you'll work hard but you'll probably meet the kind of success you're seeking as an independent agent. They earn a small commission for sales and some may earn additional . Captive vs. Independent Insurance Agent - What's the Difference? Going at it cold is not a good idea.. And personally, I think confident, business-minded individuals will thrive in an independent agency. Captive insurance agents are most often given sales leads. Furthermore, depending on the structure of their compensation package, a captive agent may be incentivized to sell only certain packages to meet their sales quotas. Instead, you operate your own business or work as part of an agency in which you represent different insurance companies. You own the book of business, which can accrue in value. Sams employer is Nationwide, to whom Sam is responsible for achieving sales goals. Inshura is a FREE online ACA insurance tool, perfect for agents and agencies! This requires more startup capital than becoming a captive agent. A captive agent is one who works with one particular insurance company. The clue here is in the title. Now, what about connecting with one? . If you immediately recoil at the thought of this, then chances are an independent agency will be the better choice for you. They typically fall into two categoriescaptive and independent insurance agents. Compensation. Essentially, they want you married to their firm and, in most cases, will make leaving difficult. In short, a captive agency will be similar to a traditional office setting where you have to balance your work with training events, team meetings, colleague relations, and more. So, let me give you a couple of examples. 1. Make sure to work with leads companies likeSmartFinancial, which fosters the growth of their partner agents. She writes books under her given name, Afarin Majidi. Let's look at the advantages and disadvantages of working as a captive insurance agent. His experience with the medical and technology industries translates into an ability to interpret and define new processes and automation strategies that bring Inshura its unique and efficient functionality. If youre unfamiliar with the different insurance companies and just getting started, working with a captive agent who can walk you through every step of the process with their insurer may be helpful. It will help to know what each agent type offers, so picking one is easy. Captive agents may be able to devote more time and research to help you craft the best policy for your small business. If you are new to the business, lack investment capital, value operational support, are attracted to the prospect ofaffiliating with a stellar, national brand and dislike having responsibility for staff, administration, and operations, this might be the way to go. When comparing being a captive agent vs. independent agent, exclusivity is the main difference. Agents can boost their ACA and other enrollments using this easy-to-use solution for quoting, enrolling, automating renewals, and managing clients! A captive agent is an insurance agent who works directly and solely for an insurance carrier. Sometimes, they are an independent contractor paid by some combination of salary, commission, and bonus. Captive Insurance Agent vs. Independent Insurance Agent - LinkedIn Then, you will need to consider where your business will operate as well. Now, it seems that most insurance agencies and carriers are looking to tech firms to give them a large chunk of their leads. Conversely, an independent agent may have a plethora of carriers from whom to seek coverage. However, many Americans still find insurance terminology and policies overly confusing and for good reason. The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user. While captive agents generally only sell their own carrier's policies (like only selling policies from All State or State Farm), there are some exceptions. Working with an insurance broker is especially beneficial if a customer has complex insurance needs or their business is growing and needs additional protection. First things first, full disclosure, Im an independent agent and always have been. It's also possible to cross sell from other carriers, mixing and matching to create a custom plan for clients. A captive agent will also have in-depth knowledge of the qualifications of specific products and therefore will quickly be able to tell you if you qualify for a product or not. Become a Small Commercial Independent Agent With The Hartford. Independent agents tend to make more on each sale they make. 2013 study conducted by InsightExpress and The Hanover, 3. Companies in the insurance space pay brokers a commission when a customer buys a policy a broker recommends. Captive agents work with a predetermined set of policies and are often only allowed to discount a policy a certain amount. If you're a captive agent, see if your carrier offers cost share programs with SmartFinancial. And thats okay. Theres one pro that I forget to mention that relates to agencies. The hustle is more grueling but the payoff can't really be beaten. Instead, insurance carriers pay a commission for each policy an independent agent sells. They had the quote to me within minutes and policy up and running shortly after. Because they can only sell one companys products, they will know exactly all the details of a specific policy and can help assist you when you are deciding between several different offerings from one company. However, not everyone can deal with that pressure. This is beneficial if you decide your relationship with your first agency isnt working out. When selecting an agent, you'll likely go with an independent or captive agent type. You compete against large national brands and budgets. Captive Agent: May be limited on the ability to help. The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes. It will help to know what each agent type offers, so picking one is easy. Matched marketing partners may include: Allstate Insurance, American Family Insurance, All Web Leads, Bizinsure.com, Choice Direct, Country Financial Insurance, Erie Insurance, Farmers Insurance, Hartford Insurance, Liberty Mutual Insurance, Nationwide Insurance, Hiscox Insurance, Precise Leads, Progressive Insurance, SAFECO, SelectQuote, State Farm Insurance, SolidQuote LLC, Travelers Insurance, Zurich Insurance. Captive Agent vs. Independent: What Are The Differences? They may be pushier with higher-ticket policies and actively work to close the deal. The other obvious downside is that they can only sell policies with one insurance company and cant provide a variety of options for your business. All rights reserved. Independent Agents. Learn how with our monthly newsletter. Another is having a limited product portfolio. Income is a bit more reliable and consistent. Thank you guys so much for reading, and I hope you found this article useful. They are able to sell insurance policies with multiple companies and can shop around to find their customers the best rates for the coverage theyre looking for. A release means you can move your carriers from one agency to another. Let's dig into both so you can make the best decision for your career. Others areindependent contractorswho rely entirely on commissions earned for each sale. On the other hand, independent agents are contracted to work with a variety of insurance companies and can sell policies from multiple providers. Too much choice can be confusing. You may email pictures to tawnya@jblbinsurance.com. Every morning I wake up knowing that if I dont make enough sales, thats my responsibility to bear. If you dont know what a release is, its pretty important to understand. Inshura is his latest innovation. After all, you're protecting your assets, livelihood, and quality of life. Woodbridge, NJ 07095-1003, Toll Free: 800.446.7647 Your employer may also provide marketing support for its insurance products and services. So, why doesnt everybody become an independent agent? Protecting your business against unseen and unplanned situations is a large part of ensuring the success of your business. Captive agents work exclusively with one insurance company. You have to reach out when you need help. They often receive a regular paycheck and product support in exchange for the exclusivity, along with other benefits. One call and I had a policy within hours! I used to scoff at the captive world. Some insurance carriers, such as State Farm, only distribute their insurance products through captive agents. If you plan to buy leads and call them all right away and begin the process of pursuing until they give in, then do it. Independent agents can be very useful when comparison shopping different policies. On the flip side, agreeing to sell a single insurer's products can limit your potential clientele and earnings. An independent insurance agent either works for an independent agency or as their own boss. Small Commercial Insurance: A Bright Spot in the U.S. Everything was pretty easy and standard, and I was really happy with the results. TrustedChoice.com can guide your efforts and match you with a local independent agent in minutes. However, for the most part, you work solely for that agency. Captive agents have to meet quotas set by the insurance companies. 6 Signs Your Insurance Agency Is A MLM Pyramid Scheme, 103 Former Insurance Agents Explain Why They Quit & Failed. I do not operate my national agency this way. Working with an agent may expedite and clarify the insurance purchasing journey. That means you get a better price for a life insurance policy. This might be for you. Captive carriers may provide some leads, OReilly says, but agents shouldnt depend on them. In some cases, independent agents can even make 50 percent more than captive agents on each sale. Most people are familiar with insurance and how to obtain it from insurance carriers, anything from life insurance to car insurance. TrustedChoice.com can guide your efforts and match you with a local independent agent in minutes. By David Duford - January 03, 2023 - 5 Mins Read. Let's look at the benefits and downsides of working as an independent agent. In an independent working environment, you need to be assertive, self-motivated, and have a strong entrepreneurial attitude. Tree Care Insurance Risks Interactive Map. Captive vs. Independent Insurance Agent - MEAA In some ways, youre on your own. If youre thinking about selling insurance, youve probably heard the phrase, captive insurance agent or independent agent and wondered what it means. Besides choosing your own work hours, you can offer coverage from multiple carriers. This can mean they are stretched thin and dont have extensive time to dedicate to customer research and relationship-building. In fact, independent agents were responsible fornearly 88% of all business insurance policieswritten in 2021. The captive agent is mostly limited to only selling policies of the company they are employed by. Either way, you're in for a fulfilling career! For coverage please contact an independent insurance agent. Here are some of the major ones: Independent agents have to provide their own start-up capital. Ive worked with a lot of agencies that have released their agents to me, and likewise, Ive released my agents who wanted to move on to other agencies as well. Large insurers who work through captive agents generally fund national promotional campaigns online and off. That said, independent insurance agents are also responsible for . If you enjoy structure and security, then becoming a captive agent may be the right choice. Purchasing insurance for your business is an important decision that often includes consideration of a wide array of factors. At the end of the day, you are the only one tasked with making the right decision for your company. And Pauls Marketing and PR campaigns convince people to re-think & improve their business.