Independent insurance agents, also known as insurance sales agents or "producers", typically sell a variety of

insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

and financial products, including

property insurance Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or bo ...

and

casualty insurance Casualty insurance is a defined term which broadly encompasses insurance not directly concerned with life insurance, health insurance, or property insurance. Casualty insurance is mainly liability coverage of an individual or organization for ne ...

, life insurance,

health insurance Health insurance or medical insurance (also known as medical aid in South Africa) is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among ma ...

, disability insurance, and

long-term care insurance Long-term care insurance (LTC or LTCI) is an insurance product, sold in the United States, United Kingdom and Canada that helps pay for the costs associated with long-term care. Long-term care insurance covers care generally not covered by health ...

. Property and casualty insurance agents sell

insurance policies In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as ...

that protect individuals and businesses from financial loss resulting from automobile accidents, fire, theft, storms, and other events that can damage property. For businesses, property and

can also cover injured Workers Compensation Insurance, product liability claims, or

medical malpractice Medical malpractice is a legal cause of action that occurs when a medical or health care professional, through a negligent act or omission, deviates from standards in their profession, thereby causing injury or death to a patient. The neglige ...

claims. Independent insurance agents typically represent a number of

insurance companies Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

, or "carriers", and sell the products that most appropriately meet the needs of their clients. Independent agents typically are very well trained and knowledgeable of the complexities of the insurance market and

insurance law Insurance law is the practice of law surrounding insurance, including insurance policies and claims. It can be broadly broken into three categories - regulation of the business of insurance; regulation of the content of insurance policies, especial ...

. Their expertise allows them to advise their clients about appropriate amounts of

and insurance coverages for their particular needs. Often, independent insurance agents will work with insurance intermediaries, who obtain quotes from multiple insurance providers and pass them off to the independent agent. Working with an insurance intermediary service allows the independent agent to review many quotes and offer their clients the best policy options available. For their efforts, independent agents are paid a commission (remuneration).U.S. Department of Labor, Bureau of Labor Statistics, ''Occupational Outlook Handbook, 2008-09 Edition'' In addition to insurance policies, agents often sell

mutual funds A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV ...

annuities In investment, an annuity is a series of payments made at equal intervals.Kellison, Stephen G. (1970). ''The Theory of Interest''. Homewood, Illinois: Richard D. Irwin, Inc. p. 45 Examples of annuities are regular deposits to a savings account, m ...

, and products that address wealth management,

retirement Retirement is the withdrawal from one's position or occupation or from one's active working life. A person may also semi-retire by reducing work hours or workload. Many people choose to retire when they are elderly or incapable of doing their j ...

and

estate planning Estate planning is the process of anticipating and arranging, during a person's life, for the management and disposal of that person's estate during the person's life, in the event the person becomes incapacitated and after death. The planning inc ...

. Independent agents must be licensed by the states in which they sell insurance and financial products. There are a number of major trade organizations that support the interests and needs of the independent insurance agent, including

Agents For Change Founded in 2005, Agents For Change''is a grassroots trade association of over 8,500 insurance agents and brokers from across all lines of insurance working together to enact an optional federal charter to allow producers the option of being regula ...

, The National Organization of Life and Health Agents (NOLHA), the Independent Insurance Agents & Brokers of America (The Big "I"), and the National Association of Professional Insurance Agents (PIA). Independent agents are

independent contractors Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any oth ...

for the insurance companies they represent. Several companies may authorize the agent to sell for them, but the agent remains an independent businessperson. While the agent collects commissions, they do not collect a salary from the companies they represent. On average, independent agents work with thirteen property and casualty and six life and health insurance companies on a regular basis. Independent agents own and control their accounts, policy records, and renewals. If an independent agent’s contract with a particular insurance company terminates, the agent retains the rights to active accounts and may place them with another insurer. Competition exists between exclusive agents and independent agents. Exclusive agents, who are salaried employees of the insurance company, write a majority of the personal lines business. However, because of the complexities involved in commercial risks, independent agents capture approximately 80 percent of the commercial lines market. It is having access to multiple markets that gives independent agents a competitive advantage in commercial lines. To add to an independent agent’s competition pool, many insurance companies are direct competitors to the agents they appoint. For example,

Progressive Insurance The Progressive Corporation is an American insurance company, the third largest insurance carrier and the No. 1 commercial auto insurer in the United States. The company was co-founded in 1937 by Jack Green and Joseph M. Lewis, and is headquar ...

spends nearly $300 million a year in advertising directly to the public. Yet, Progressive is the country’s largest writer of private passenger auto insurance through the independent agent distribution channel.

References

External links

Independent Insurance Agents & Brokers of AmericaNational Organization of Life and Health Agents (NOLHA)
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