Distribution Channels

Distribution Channels


Life insurance was once sold primarily by career life agents, captive agents that represent a single insurance company, and by independent agents, who represent several insurers. Now, life insurance is also sold directly to the public by mail, telephone and through the Internet. In addition, in the 1980s insurers began to market annuities and term life insurance through banks and financial advisors, professional groups and the workplace. A large portion of variable annuities, and a small portion of fixed annuities, are sold by stockbrokers. In 2013 independent agents held 49 percent of the new individual life insurance sales market, followed by affiliated (i.e., captive) agents with 41 percent, direct marketers with 4 percent and others accounting for the remaining 6 percent, according to LIMRA.


Life Individual Market Share By Distribution Channel, 2007-2016

(Based on first year collected premiums)

(1) Includes brokers, stockbrokers and personal producing general agents.
(2) Includes career, multiline exclusive and home service agents.
(3) No producers are involved. Excludes direct marketing efforts involving agents.
(4) Includes financial institutions, worksite and other channels.

Source:  LIMRA’s U.S. Individual Life Insurance Sales survey results and LIMRA estimates.

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(1) Short-term and long-term disability.

Source: Eastbridge Consulting Group, Inc.

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  • Worksite marketing is the selling of voluntary (employee-paid) insurance and financial products at the worksite. The products may be on either an individual or group platform and are usually paid through periodic payroll deductions.
  • Worksite sales of life and health insurance totaled $6.89 billion in 2014, up about 3.7 percent from 2013.


Insurance agents, including career agents, who sell the products of a single life insurance company, and independent agents, who represent several insurers, accounted for 37 percent of annuity sales in 2015. State and federal regulators require sellers of variable annuities to register with NASD and the Securities and Exchange Commission.


Sales Of Individual Annuities By Distribution Channels, 2011 And 2015

Source: U.S. Individual Annuity Yearbook - 2015, LIMRA Secure Retirement Institute.

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Agency writers, whose products are sold by independent agents or brokers representing several companies—and direct writers, which sell their own products through captive agents by mail, telephone, or via the Internet and other means—each account for about half of the property/casualty (P/C) market. There is a degree of overlap as many insurers use multiple channels.                      

A.M. Best organizes insurance into two main distribution channels: agency writers and direct writers. Its agency writers category includes insurers that distribute through independent agencies, brokers, general agents and managing general agents. Its direct writers category includes insurers that distribute through the Internet, exclusive/captive agents, direct response and affinity groups.

  • In 2014 direct writers accounted for 51.2 percent of P/C insurance net premiums written and agency writers accounted for 46.6 percent, according to A.M. Best.*
  • In the personal lines market, direct writers accounted for 71.0 percent of net premiums written in 2014 and agency writers accounted for 27.3 percent. Direct writers accounted for 68.4 percent of the homeowners market and agency writers accounted for 28.6 percent. Direct writers accounted for 72.1 percent of the personal auto market and agency writers accounted for 26.8 percent.*
  • Agency writers accounted for 67.7 percent of commercial P/C net premiums written, and direct writers accounted for 29.5 percent.*

*Unspecified distribution channels accounted for the remainder.

  • There were 38,500 independent agencies in the United States in 2014, about the same number as in 2012, according to the Independent Insurance Agents and Brokers of America’s 2014 Agency Universe survey.
  • As the number of agencies has leveled off, the IIABA notes that a growing proportion of agencies have principals over the age of 65—18 percent in 2014, versus 10 percent in 2012.
  • Fifty-four percent of jumbo agencies (revenues of $10 million or more) have locations in more than one state, compared with 5 percent of all agencies.
  • Almost half (46 percent) of agencies are located in large metropolitan areas.
  • About one in eight agencies (13 percent) was involved in a merger or acquisition in the past two years. Almost half (48 percent) of jumbo agencies were involved in such a transaction.