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Independent vs. Captive Agencies

When starting your own insurance agency, you will need to decide if you will operate as an independent agent or a captive agent. Whichever route you choose, it’s important to understand that each course has its pros and cons. Deciding which path to take is a process that should be evaluated carefully.

Brightstar Insurance Services specializes in assisting agents and agencies analyze which path to take.We are experts in helping agents who focus on health, life, disability, Medicare and personal lines policies launch and grow their agencies. We’ve got the expertise and the resources to ensure venture into the insurance business is a successful one.

What are independent agents?

Independent agents are essentially in business for themselves but not by themselves. They are independent because they don’t have to sell the insurance policies of only one insurance company. Rather, independent agents accumulate and sell a wide variety of policy options from numerous insurers.

The Benefits of Going Independent

One of the biggest perks of being an independent agent is that you have the freedom to contract with multiple carriers. You can therefore grow your business by targeting many different types of customers, and you can cross-sell policies from different insurers, therefore offering customers more variety.

Also, you usually have a higher amount of control over your commissions and the direction of your agency. Therefore, you’ll have autonomy in ways that might help grow the business’s financial value.

The Cons of Going Independent

Successful independent agencies, however, involve a lot of work. Though you might have more freedom in business decisions, you must manage this freedom carefully. It is solely up to you to market your business, attract insurance partners, find new clients, and navigate the business’s growth.

What are captive agents?

Captive agents essentially lack the freedom of independent agents. They are bound to sell the policies of only certain carriers, usually only one.  Additionally, they might have quotas and other requirements from a particular carrier.

The Benefits of Following Captive Models

Insurance companies frequently provide captive agents with ongoing training and financial support, which can prove instrumental in getting the business off the ground. The insurance contractor often handles a lot of the marketing, advertising and lead generations for their respective agencies.

Agents therefore have a lot of opportunity to gain expertise about their respective insurance company and the policies they sell. So, while you might not be able to sell as large of a portfolio as an independent agent, you can still rely on your carrier to support you.

The Cons of Captive Models

Captive agent models do have their drawbacks. The agent might receive lower commissions because the agency, not the carrier, pays them. Agents also usually don’t have the freedom to expand their policy portfolio. This might limit them in the types of policies they can sell and the payments they can receive. Finally, and most importantly, captive agents don’t have ownership of their book of business.

Brightstar Supports All Agents

Any captive or independent agent can rely on Brightstar Insurance Services to learn the ins and outs of the insurance business. We can help you grow your operation, tailor your coverage offerings to your target audience, and ensure your business has a plan for long-term success.You are an independent agent with Brightstar while enjoying the benefits offered by some captive agencies. 

Contact us today at 855-909-STAR or by filling out our online form.

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