What Is a Captive Agent?
A captive agent is an insurance policy agent who best works for one insurance policy company. A captive agent is paid by the use of that one company, generally with a mix of salary and price, plus benefits. They may be a full-time employee or an independent contractor.
Key Takeaways
- A captive agent is an insurance policy agent that works for only one insurance policy company.
- Captive agents best advertise the products of the insurance policy company they art work for and can’t lend a hand people out of doors of that offering.
- The opposite of a captive agent is an independent agent that works for a lot of insurance policy companies.
- Captive agents are generally paid a salary and price and are provided with benefits.
- The advantages of being a captive agent include the benefits of operating for a company, very similar to administrative tasks, a national selling price range, and a client tick list.
- The disadvantages of being a captive another time include cumbersome contracts, selling best specific products, and products that may not be in the best passion of the patron.
Working out a Captive Agent
Insurance plans agents can choose to be each captive agents or independent agents. Captive agents art work for only one insurance policy company whilst an independent agent does no longer art work for any specific insurance policy company on the other hand fairly can advertise insurance coverage insurance policies from an array of companies.
As captive agents art work for only one company, they have an in-depth knowledge of their specific company’s insurance policy products, on the other hand can’t lend a hand a client who does no longer need or does no longer qualify for that company’s products.
In a variety of cases, the mummy or dad company would in all probability push its captive agents to advertise certain insurance coverage insurance policies or meet certain product sales quotas, oftentimes no longer being the best product for the customer. Independent agents are generally upper for consumers because the agent can seek out the best protection for that consumer’s needs. The only problem is that an independent agent would possibly not have specialized knowledge a few specific company’s products.
Captive agents steadily excel at providing a stupendous level of supplier to their consumers. This is so on account of they have the freedom to spend overtime on courting construction, fact-finding, and buyer toughen. In an more and more digitized insurance policy marketplace, those are the types of problems consumers more and more are not getting.
Advantages and Disadvantages of a Captive Agent
An independent agent affiliation can be upper for agents because it offers a further other provide of income, however it’s going to even be riskier because the agent would in all probability wish to provide their own startup capital, pay for business expenses, and get ready benefits. Being an independent agent requires having to start out out one’s private business, which incorporates the entire aspects of setting up retailer, along with having to go looking out insurance policy companies to art work with.
A captive agent on the other hand has the ones aspects taken care of for them and does no longer have to position up crucial amount of capital to start out out operating. The principle reasons an insurance policy agent wish to art work as a captive agent is due to this fact financial and the good thing about conducting business. Their company generally provides an administrative center, administrative workforce to process paperwork, ongoing training, vital bonuses, and other motivational techniques, not to indicate crucial national selling price range.
Captive agents typically download extensive lists of possibilities from their insurance policy company on account of when shoppers respond to selling, the company directs them to a captive product sales agent in their area.
Captive agents are also generally paid a salary and price and procure benefits. Independent contractors are generally merely paid price and have to provide benefits for themselves.
Some drawbacks to being a captive agent are that you are tied to cumbersome contracts and have tasks to the insurance policy company that you simply art work for, steadily tying your fingers in how you can conduct business.
Some insurance policy carriers nevertheless impose quotas for selling products, even if they are subpar when compared to competing products to be had in the marketplace. As a captive agent you’re going to be not able to advertise what is best for your consumer on the other hand fairly what the insurance policy company has to offer, and this can be at a greater price than what the patron would possibly simply download in other places. As a captive agent, your goal is to increase business for your company as opposed to provide what is best for your consumer.
