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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 2010 to 2019, but have lost some ground to affiliated agents and direct response companies, as shown in the charts below.
(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, 1975-2019, LIMRA, 2020.
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Total U.S. individual annuity sales rose in 2018 by $30 billion or 15 percent after falling for three consecutive years. Independent broker-dealers were the largest single distributor of annuities, with 23 percent of sales, down slightly in share from 2014 when they accounted for 25 percent of the market. Independent agents commanded the second-largest share of annuity sales by channel with 20 percent in 2018, up from 17 percent in 2014. State and federal regulators require sellers of variable annuities to register with the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).
Source: U.S. Individual Annuities, 2019 Year in Review, LIMRA, 2020.
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. |
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