What is a captive agent?
When deciding whether working as a captive agent is the right career move, consider these pros and cons.
Editor’s note: This column is part of PropertyCasualty360’s Foundations of P&C Insurance series, which aims to bring new insurance professionals up to speed, while keeping industry veterans sharp. On Fridays, PC360 will offer up fresh content covering the nitty-gritty details of P&C insurance, tips for professional development, articles looking at the industry’s more niche concepts, and the history of certain lines and programs.
Unlike independent insurance agents, who are able to offer policies to their customers from a number of companies, captive agents work for one specific insurer. These agents are generally paid through some combination of a base salary, commission and benefits. In these situations, the insurance company owns and controls all expiration dates and policy records as a part of this exclusive agency system.
According to Investopedia, the upsides of being a captive agent include gaining a deep knowledge of your company’s products, as well as having all of the benefits of working for a company. These benefits might include administrative tasks, a national advertising budget, lead assistance and not having to provide their own startup capital. Captive agents also often have more freedom to spend time building relationships in their community and providing service to their customers.
Of course, being tied down to one insurance company means captive agents may be unable to help their customers with any needs outside of the reach of their company’s products. Insurance companies also often require their captive agents to hit quotas or sales goals for specific products, which means captive agents could find themselves in a position where they have to push products on their insureds that they may not actually need.