What is a captive agent in the insurance context?

A captive agent in the insurance context is defined as an individual who works for one specific insurance company. This arrangement means that the agent is typically limited to selling the products and services offered by that particular company. Captive agents receive training and support from their employer and are often compensated through commissions based on the sales they make of their insurance products.

This structure allows the insurance company to maintain a consistent brand and product messaging while ensuring that the captive agent is fully knowledgeable about the company's offerings. However, it’s important to note that being a captive agent may limit the agent's ability to provide clients with a wide range of options, as they cannot offer products from multiple insurers. By focusing solely on one company, captive agents can foster strong relationships with clients based on specialized knowledge of their products. This characteristic sets them apart from independent brokers, who can represent multiple companies and offer a broader range of options to their clients.