Independent Insurance Agent Vs Captive Insurance Agents

6 Jan

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Hello fellow agents and potential Insurance Agents! If you are at the moment in Insurance Sales or are considering a profession in Insurance Sales, the following insights might be beneficial in making confident you are on the right path for a extended and rewarding insurance Career. It need to also assist you choose what kind of contracts, Independent or Captive, you really feel better fit your needs and objectives correct now at this point and time in your profession.

When I started in Insurance Sales 28 years ago, I was recruited by a Firm that only provided Captive Sales Contracts. I did not know that Independent Contracts existed let alone the pros and con’s in between them. I spent the initial 9 years of my profession selling, recruiting and education underneath a captive contract. I have sold, recruited and trained agents the final 18 years under Independent Sales Contracts.

1 of the huge issues I seasoned more than time functioning underneath a captive contract with 1 organization was not obtaining enough item selection. There had been a number of periods of time when particular items we offered were merely not competitive in the marketplace.

This severely restricted our capability to provide options to a lot of potential clients. I have found more than the years that most captive organizations generally only have two or 3 competitive goods at a time. They usually are focused on 1 or two niche markets. This limits your cross selling possibilities when you are not permitted to pick up other contracts. As an Independent Agent you are free to contract with many various organizations. This can be a difficulty even though due to the fact a lot of insurance agents that contract with to numerous firms at a time commence to lose concentrate. There will be instances, however, when you could want to alter markets or add an additional company that has a quite competitive product. You will want to be an Independent Agent to do that.

The other massive concern I had functioning below a Captive Contract was that I did not own my block of business. An additional phrase for ownership of your block of company would be “getting vesting rights on your block of organization.” The business I worked for required you to be their 15 years ahead of you had 100% vesting rights on your block of enterprise!

When I left after 9 years I was only 40% vested. That signifies I did not obtain 60% of my renewals on my in-force policies when I left and became an Independent Agent. Once again, I did not know nor was I told that there had been other opportunities to sell Insurance and have one hundred% vesting rights all your sales from day 1! I learned the difficult way. This is also why it took me a long time to get up the nerve to make the move because I knew I would lose a big chunk of my renewal revenue. There are a lot of agents that operate for Independent Agencies that sell many companies that do not supply vesting rights. So when the agent leaves the Agency nevertheless gets all the renewals on the enterprise. This may possibly not be all poor based on the other support and solutions that Agency could be providing the Agent.

Usually speaking, an additional distinction you will notice is that Independent Agents commission schedules are normally larger then that of Captive Insurance Agents. For example, when I sold as a Captive Agent I earned 20% commission our Health Insurance goods and 55%-65% commission on our Life Insurance goods. When I moved over to the Independent Agent Contracts I began earning 25% commission on my Health Insurance Sales and 90%-100% commission on my Life Insurance Sales.

Traditionally one of the benefits with Captive Businesses was that they provided a lot more coaching and support for a new agent getting into the business. But presently there are several fantastic MGA, NMO, IMO and FMO Agencies that offer all the instruction and assistance that standard Captive Businesses offer you. Plus you still get leading commission contracts, Quick vesting rights, many company portfolios, Lead assistance systems, and so on.

Properly, once once more we hope that this data has been useful to you. My you not have to discover certain issues the tough way as I had to early on in my Profession. By not obtaining 1st hand expertise of the pros and cons of Independent vs Captive Contracts it cost me a lot of time and income. An Insurance Sales Profession can be really rewarding and your journey to achievement can be considerably quicker if you are starting from a point of knowledge!

10 Responses to “Independent Insurance Agent Vs Captive Insurance Agents”

  1. Pilar January 5, 2013 at 2:30 pm #

    My daughter gained her license yesterday. I understand that i’m technically obligated to report that idea to my car insurance company to ensure that they are able to start collecting the rise in rates. What goes on basically avoid that, but rather let things be? The 3 cars which i own are insured as well as in my title. She’s presently driving one of these regularly. If she were to go into any sort of accident in the future (say, in 6 several weeks), would the insurance provider won’t pay for it since i did not add her towards the policy? Or are they going to pay for it after which compel me to include her at that time? Let me hear some knowedgeable reactions before I give them a call. They’ll, obviously, let me know that I must add her immediately. But will i really?

  2. Kermit March 26, 2013 at 8:55 pm #

    companies? And as far as being an agent vs. being a broker, what is more profitable? What is least stressful?

  3. Mariella April 6, 2013 at 8:43 pm #

    I recently was laid off from the Oil and Gas business and now I am considering starting my own insurance company. I am wondering if anyone knows what are the big independent agencies and how much can you potentially make a year. Also, potential earnings for State Farm, AllState, Farmers and Nationwide and how these companies work.

    Thank you all for your input.

  4. Jarred May 3, 2013 at 2:09 am #

    I have been an Allstate Customer for years, but people tell me I could get insurance much cheaper through other agents (combined home, auto,motorcycle). When I was younger I always bought cheap insurance through independent agents, but always seemed shady. Does anyone have experience with independent agents or can any indpendent or allstate (St. Farm, Country Companies) weigh in? Have >700 credit score and no accidents, tickets, or claims on record and married w/2 kids. Thanks.

  5. Sheila May 6, 2013 at 9:18 pm #

    What is the tax rate for independent contractors in NYC? My average income is around $2,200/month. When do I pay taxes? Will my work give me something like a W2?

  6. Eusebio July 1, 2013 at 12:26 am #

    Hello everyone, could somebody enlighten me on how i measure the this..


  7. Zachary July 7, 2013 at 5:09 am #

    What are the independent and dependent variables in these 3 equations?

    Hypothesis 1: If put the ink on tissue paper then soak it in water then rings of different colors will form around the ink.

    Hypothesis 2: if we put a magnet in the matter, then iron will come out

    Hypothesis 3: If we Put the matter in a tiny dish then boil it over a burner, salt will be found.

  8. Ivan August 3, 2013 at 3:13 pm #

    The actual question of my project is Does Dripping Water Cause Erosion. Im confused about the Materials and What the independent variable would be

    What other materials do i need other than Soap or rocks water and a pan

    Would the independent variable be The rocks the water.

    Since we have to do three trials would i change anything like the water rock…

    As you could probably tell ive never been in a science fair before. Thanks!

  9. Ricardo August 7, 2013 at 6:02 am #

    How do you book independent wrestlers, and a ring for an event? Is there a website?

  10. Arnoldo August 24, 2013 at 4:23 am #

    I am curious as to what an independent woman really seeks in a man. Everyone seems to have an opinion on the subject, but i have never been given the answer from an independent woman so i dont really know.

    Is it really possible for a country guy and an independent woman to cross paths and start a relationship? Its something i have to ask since no indpendent woman intimidates me, what does is a woman who can live without hugs acknowledging my existence.

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