Facts + Statistics: Distribution channels

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. Independent insurance agents have held over half of the individual life insurance market over the 10 years from 2011 to 2020, but have lost some ground to affiliated agents and direct response companies, as shown in the charts below.

Life Individual Market Share by Distribution Channel, 2011 and 2020


(1) Includes brokers, broker-dealers, personal producing general agents and registered investment advisers.
(2) Includes agency building, multiline exclusive and home service agents.
(3) No producers are involved. Excludes direct marketing efforts involving agents. Includes internet sales where consumers submit online applications.
(4) Includes financial institutions, worksite and other channels.

Source: U.S. Individual Life Insurance Sales Trends, Industry Estimates, 1975-2020, LIMRA, 2021.

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Worksite Life Insurance Sales By Line Of Business, 2018

(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 $8.51 billion in 2018, up 4.5 percent from 2017.

Annuity distribution

Total U.S. individual annuity sales fell by $23 billion in 2020, or 9.5 percent, after growing 3.4 percent in 2019. Independent broker-dealers were the largest single distributor of annuities, with 25 percent of sales, higher than in 2016 when they accounted for 21 percent of the market. Independent agents accounted for the second-largest share of annuity sales by channel with 19 percent in 2020, about the same as in 2016.

Sales Of Individual Annuities By Distribution Channels, 2016 And 2020


Source: U.S. Individual Annuities, 2020 Year in Review, LIMRA, 2021.

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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.

  •  In 2018 direct writers accounted for 51.4 percent of P/C insurance net premiums written and agency writers accounted for 47.7 percent, according to A.M. Best.*
  • In the personal lines market, direct writers accounted for 69.5 percent of net premiums written in 2018 and agency writers accounted for 29.8 percent. Direct writers accounted for 66.5 percent of the homeowners market and agency writers accounted for 31.6 percent. Direct writers accounted for 70.8 percent of the personal auto market and agency writers accounted for 29.0 percent.*
  • Agency writers accounted for 70.8 percent of commercial P/C net premiums written, and direct writers accounted for 27.9 percent.*

*Unspecified distribution channels accounted for the remainder.

  • There were an estimated 36,500 independent agencies in the United States in 2018, down from 38,000 in 2016, according to the Independent Insurance Agents and Brokers of America’s (IIABA) 2018 Agency Universe survey.
  • The IIABA says the 2018 decrease primarily reflects a new data resource providing more accurate and insurance industry-focused data, along with increased mergers and acquisitions.
  • In 2018 the estimated percentage of small agencies (less than $150,000 in revenue) accounted for 35 percent of all agencies, while jumbo agencies (revenue of $10 million or more) now account for 2 percent of agencies.
  • The proportion of agencies in small towns and rural areas returned to 19 percent in 2018, where it had been in 2014, after falling to 9 percent in 2016. About half (51 percent) of agencies are in large metropolitan areas.
  • In 2018, 12 percent of the agencies in the study were involved in acquisitions, 1 percent merged with another agency, and 3 percent converted from exclusive or captive agencies to independent agencies.

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