LIFE INSURANCE 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, 2005-2014
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 2013. 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, 2010 AND 2014
PROPERTY/CASUALTY INSURANCE DISTRIBUTION
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.
*Unspecified distribution channels accounted for the remainder.