Exclusive agency system
An exclusive agency system is a kind of insurance marketing system under which the agent represents only one company or group of companies under common ownership.
In the property and casualty industry, insurers that use this marketing system are also known as “direct writers.”
Exclusive Agency System refers to a distribution system for insurance through which agents represent just a single company or a group of companies under similar management.
Exclusive Agency System indicates a distribution system for insurance allowing agents for selling and servicing insurance contracts and agents may represent either one insurer or a group of insurers under the same management.
The managing insurer or group of insurers will reserve the ownership, the policy records’ utilization, expiration date, and control. The agents are also called captive agents. The captive agents are obliged for submitting business only to the managing insurer, or at least, give that insurer first rights of refusal on a sale. In exchange for the services of the captive agents, the insurer generally gives them an allowance for expenses of the office and some employee benefits like health insurance, life insurance, credit unions, and pensions.
More from this Section
- All-equity discount rate
All-equity discount rate is a discount rate in capital budgeting that would be appropriate ...
- Public adjustor
Public adjustor claims adjustor who represents the insured rather than the insurance company ...
- Purchasing Power Parity (PPP)
Purchasing power parity (PPP) theory, which attempts to quantify the inflation- exchange ...
- Short Straddle
A Short Straddle is a tactic in which one offers both the put and a call option with about ...
- Market Capitalization
Market Capitalization is the total value, at market prices, of the securities at issue ...