In today’s world, it is getting hard to tell the difference between a retail insurance agency and a wholesale insurance agency. More and more states are dropping any distinction between a broker and an agent. So what’s the difference anyway?
Historically, an agent was always the person a customer would deal with. The man on the ground. Whether it was home, auto, gl insurance, or workers comp, agents would gather the information about the risk and come back with the a quote or quotes. They were the liaison between a prospect or insured and an insurance company. Agents either worked for themselves, an agency, or were a captive agent of a single insurance company.
A broker was associated with an insurance wholesaler and acted much like an actual insurance company. In most cases they had quoting and binding authority with the carriers they represented. Brokers were typically very specialized in one or two lines of coverage; like retail insurance, and called on agents to promote their specialized products. An example of a specialized program would be a brokerage with a work comp product exclusively for home health companies.
Today, the term broker or agent has very little distinction. More and more we’re seeing retail agencies with direct wholesale products and wholesale agencies offering quotes directly to business owners and prospects.
The Internet has been a game changer for the insurance status quo. Consumers no longer need to follow the social order. And agents, brokers, retail agencies, and wholesalers must respond in order to compete. See retail insurance vs. wholesale insurance.
