How To Be Captive Agent or Captive Insurance Agent?
What Is a Captive Agent?
The term “captive insurance agent” refers to a broker who does business with just one insurer. A captive insurance agent receives income, commissions, and benefits from their employer. Depending on the circumstances, they might be a full-time employee or a freelancer.
Main Key Points
- Captive insurance agents work with one firm.
- Captive insurance salespeople exclusively sell their employer’s goods and can’t assist others.
- Independent insurance agents are the antithesis of captive agents.
- Captive agents get a salary, commission, and perks.
- Captive insurance agents enjoy administrative chores, a national advertising budget, and a customer list.
- Being a captive again may lead to onerous contracts, selling just particular items, and offering things that aren’t in the client’s best interest.
Read: How to Be Independent Insurance Agents
Understand a Captive Insurance Agent
Captive or independent agents may sell insurance. Independent agents can sell policies from a variety of companies, while captive agents only work for one.
Captive insurance brokers know their company’s products well but can’t serve customers who don’t need or qualify for them.
The parent firm may encourage captive agents to sell specific plans or reach sales goals, which isn’t always beneficial for the consumer.
Independent agents may find the best insurance for their customers. Independent agents may lack specialized product knowledge.
Captive insurance salespeople provide excellent customer service. They can focus on relationship building, fact-finding, and customer service.
In a digitized insurance market, clients don’t get these things.
Advantages and Disadvantages of a Captive Insurance Agent
An independent agent arrangement gives the agent more ways to make money, but it may be riskier because the agent may have to put up money up front, pay company costs, and set up perks.
Independent agents must establish their own businesses and locate insurance firms to deal with.
A captive agent, on the other hand, doesn’t need much funding to start functioning. Insurance agents choose captive agencies for financial and economic reasons.
Their organization has an office, staff for paperwork, regular training, bonuses, and other ways to motivate people, as well as a big advertising budget.
When a customer responds to an ad, the insurance company puts them in touch with a captive agent in their area.
Captive agents earn pay, commissions, and perks. Independent contractors are frequently paid on commission and must offer benefits.
Captive insurance agents are bound by complex contracts and have duties to their employer, limiting how they may do business.
Some insurance companies still set sales goals for inferior goods.
As a captive agent, you can’t market what’s best for your customer, just what the insurance company offers, which may be more expensive.
As a captive agent, your aim is to promote corporate business, not serve your customer.
