What Is An Insurance Carrier? Carrier vs. Agency

Difference Between Carriers vs. Agencies

When shopping for insurance, you’ve probably heard the jargon “insurance carrier” and “insurance agency” thrown around. Here are the basic definitions of each term. 

• Insurance Carrier: The company responsible for policy management, pricing, as well as the claims process. They create the insurance policies that agencies will go on to manage. 

• Insurance Agency: The organization responsible for selling insurance policies to customers. Also called brokerages. 

What Is An Insurance Carrier? Its Definition

An insurance carrier creates, manages, and prices insurance policies. When someone says insurance company, it is likely that they are referring to an insurance carrier. 

An insurance carrier can: 

• Create its own insurance policies and products 
• Determine what each policy covers or excludes 
• Pay out claims 
• Be responsible for the collective risks of policyholders 
• Set other details and rules related to its insurance policies 

Insurance carriers operate under strict regulations from the government so that they have more stability and are able to provide the coverage that their customers need. Generally, an insurance carrier cannot offer policies that it did not create itself. 

What Is An Insurance Agency? Its Definition

An insurance agency sells policies to customers and handles any customer questions or concerns. 

There are two main kinds of insurance agencies:

• Captive Agency: Is contracted to only work for a single, specific insurance provider. They won’t sell policies from other carriers. If you know the carrier you want to buy a policy from, a captive (AKA exclusive) agent may be the better choice for you because they know that carrier like the back of their hand. 

• Independent Agency: An independent agency has access to policies from multiple providers and may sell policies to you from any of them. If you don’t have your heart set on a single provider and are interested in finding the best carrier for you, an independent agency is likely the best choice. 

Biggest Examples Of Insurance Carriers

When it comes to what the biggest insurance carriers are, there are numerous questions to consider. What is the company’s market share? How recognizable is the company brand? 

Many insurance carriers choose to specialize in certain types of insurance, such as auto insurance or property insurance. 

Here is a list that includes some of the most recognizable and popular insurance carriers, as well as each carrier’s estimated market share and premiums written.

1. Progressive 

Progressive is the largest personal auto insurance carrier in the United States, with a staggering amount of market share and billions of dollars worth of premiums written out. The company also sells numerous other insurance policy types, such as homeowner’s insurance. 

2. State Farm 

State Farm is another insurance company that holds great market share and reputation within the auto insurance industry. State Farm Group allows customers to personalize their insurance by bundling different policies and saving on insurance premiums. 

3. GEICO 

Well known for its lovable gecko mascot, this insurance company sells commercial auto, motorcycle, boat, and other kinds of insurance policies. 

4. UnitedHealth Group

Many consider UnitedHealth Group the largest health insurance company, based on its large market share, revenue, as well as membership. 

5. Anthem 

Anthem offers health insurance for individuals and families, with more than 40 million policyholders. When shopping for health insurance, UnitedHealth Group and Anthem are two of the most popular health insurance carrier choices. 

Insurance Carrier vs Agency FAQs 

Is it better to buy insurance from an insurance carrier or agency?

Oftentimes, you can gain more benefits from shopping for insurance with an agency. Agencies are generally less biased and can offer you more competitive quotes and options, whereas a carrier you buy from directly will naturally only promote its own policies. 

If you want to ensure that you get the best insurance for your price, you may want to consider buying from an agency as opposed to purchasing from a single insurance carrier. 

What insurance policies does an agency sell?

An insurance agency will often sell policies from numerous different insurance carriers. This is because, unlike insurance carriers, some agencies are independent and therefore not contracted to sell a single company’s policies. 

Is an insurance agent the same as an insurance broker?

Both agents and brokers should be licensed to sell policies. In general, agents will be working on behalf of one or multiple insurance carriers, whereas a broker is essentially your personal shopper, looking for the optimal policy for you. 

Where is the best place to buy insurance?

If you’re shopping for insurance, come find our team at Worth Insurance. Our expert agents are here to make the process smooth and seamless for you. Let us quickly find you competitive quotes from top insurance companies across multiple industries.

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