Feels like we’re speaking a couple of kidnapped spy, proper?
Nope, sorry. We’re really going to speak about captive insurance coverage brokers. They’re not practically as fascinating as operatives in espionage thrillers, but it surely is necessary to know who they’re—particularly while you’re searching for somebody that will help you together with your insurance coverage choices.
Whether or not you’re already working with an insurance coverage agent, contemplating your choices, or actively procuring, there are some straightforward methods to establish a captive agent.
Let’s stroll by what you have to know.
What Is a Captive Agent?
A captive agent, aka an unique insurance agent, works for a single insurance coverage firm. Captive brokers can solely promote the merchandise of the insurance coverage firm they work for.
How Does a Captive Agent Work?
As a result of captive brokers solely work for one firm, they usually have in-depth data of their firm’s merchandise. Captive brokers needs to be specialists on the totally different insurance policies, reductions and protection add-ons for the provider they work for.
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Captive brokers get a fee for each sale they make, however their fee fee tends to be decrease than an unbiased agent as a result of they’re additionally paid a wage. They get monetary assist from their firm for promoting and hiring prices too (if their enterprise is rising and they should rent extra assist).
Captive Agent Professionals and Cons
The largest good thing about working with a captive agent is their in-depth experience about their firm’s merchandise and insurance policies. They’re sometimes very aware of the totally different protection choices and claims submission process.
Captive insurance coverage brokers usually don’t must spend time discovering purchasers, or spend cash on promoting, advertising and marketing and different overhead prices as a result of it’s all dealt with by the corporate they work for. That may imply they’ve extra time to spend with prospects.
One of many downsides is that captive brokers usually have gross sales quotas to fill. That stress can result in pushier gross sales ways as a result of they’re attempting onerous to please their boss. And that may go away the door open on your true must take a backseat.
The opposite draw back, and possibly the largest, is that captive brokers can solely promote you a coverage from their firm. Meaning there’s a restrict to the pricing flexibility and protection choices they’ll provide.
Unbiased Brokers vs. Captive Brokers
Let’s get straight to the purpose. You’ll get higher service and extra choices while you work with an unbiased agent as an alternative of a captive agent. Right here’s why.
Whereas it’s true that captive brokers are skilled to be aware of their firm’s product(s), unbiased brokers are educated about a number of merchandise from a number of corporations. And the extra choices they’ll select from, the higher the chances that an unbiased agent can discover the precise insurance coverage product for you.
Captive brokers, alternatively, may push you to purchase a generic product you don’t want simply to meet their firm’s gross sales quota. They usually actually can’t evaluate choices from different corporations, to allow them to’t offer you a whole image of your choices.
Most insurance coverage brokers contemplate turning into an unbiased agent as a profession objective. Who can blame them? Unbiased brokers get pleasure from extra versatile hours, extra studying alternatives and better success. Sounds fairly interesting, proper?
Which means that unbiased brokers normally begin out as a captive agent till they study the ropes and really feel skilled sufficient to exit on their very own. Translation: Unbiased insurance coverage brokers know greater than captive brokers as a result of they’ve been within the enterprise longer. And while you’re coping with something as necessary as insurance coverage—you need expertise in your aspect!
Hear, yow will discover each captive brokers and unbiased brokers who super-serve their purchasers. However captive brokers clearly have one hand tied behind their backs as a result of they’ll solely discuss to you about one firm’s merchandise. Plus, unbiased brokers who’ve been within the enterprise for some time are profitable for a purpose—they know the insurance coverage trade and so they know how you can discover precisely what their purchasers want.
That’s why we select to work with unbiased brokers over captive brokers by our Endorsed Native Supplier (ELP) program. We handpick our insurance coverage ELPs so you’ll be able to work with a reliable, educated insurance coverage trade skilled in your space. They’re seasoned insurance coverage execs who’ve the pliability to seek out the precise coverage for you.