American Agency System

DEFINITION of 'American Agency System'

A method of selling insurance policies in which independent insurance agents locate the best insurance policies for their customers and receive a commission for each insurance policy sold. The American agency system uses independent agents who can sell policies from a wide variety of companies, unlike captive agents, who can only sell one company's insurance products.

BREAKING DOWN 'American Agency System'

While many insurance customers these days are accustomed to calling different insurance companies and comparing quotes online, an independent agent, working in the manner known as the American agency system, does the work of researching different policies and companies on the customer's behalf. This may help a customer obtain a better deal.

RELATED TERMS
  1. Agency Plant

    The amount of presence that an insurance company has in a market.
  2. Captive Agent

    An insurance agent who only works for one insurance company. ...
  3. Direct Writer

    A captive agent that only issues insurance policies from a specific ...
  4. Brokerage General Agent

    An independent firm or contractor working for an insurance company ...
  5. Independent Insurance Agents & ...

    Independent agents who shop around at different insurance companies ...
  6. Brokerage Department

    A department within an insurance company whose agents specialized ...
Related Articles
  1. Financial Advisor

    Becoming An Insurance Agent

    Few careers match the opportunity for as quick and large a paycheck as does being a life insurance agent.
  2. Personal Finance

    Intro To Insurance: Fundamentals Of Insurance

    By Cathy ParetoHow does insurance work? Insurance works by pooling risk.What does this mean? It simply means that a large group of people who want to insure against a particular loss pay their ...
  3. Personal Finance

    Bundle Your Insurance For Big Savings

    Bundling your insurance can save you money and time. Read on to see how get the most out of multiline insurance discounts.
  4. Personal Finance

    How Hard Is a Career Selling Life Insurance?

    Learn why selling life insurance is a difficult way to make a living, but also how agents who persevere are rewarded down the road with a strong passive income.
  5. Managing Wealth

    The Pro’s Guide to Selling Life Insurance to Your Clients

    Learn about the distinguishing characteristics a life insurance agent needs to be successful in the highly competitive life insurance industry.
  6. Professionals

    Career Advice: Stockbroker Vs. Insurance Agent

    Compare and contrast careers as a stockbroker and insurance agent. Understand the skills and attributes required for success in each career.
  7. Personal Finance

    Choosing The Best Life Insurance Company For You

    What to consider before you choose the life insurance company that can give you the policy you need now – and meet your needs as your life evolves.
  8. Personal Finance

    How To Compare Home Insurance Companies

    There's a ton of information out there. Here's how to organize it and find the best company and best rates when you insure your home.
  9. Personal Finance

    Becoming An Insurance Agent

    Life insurance protects families, employers and others from financial loss in the event the insured individual dies.
  10. Personal Finance

    Is Selling Life Insurance the Right Career For You?

    Learn why life insurance sales is a difficult career in which most people do not succeed, and understand what traits it takes to be successful.
RELATED FAQS
  1. Should I be worried about my insurance company?

    Yes, policyholders should also take a serious look at the financial stability of their current insurance company especially ... Read Answer >>
  2. Is short term care insurance a good idea?

    I have talked with an insurance agent and been approved for short term care insurance. I am 65 and in good health. I just ... Read Answer >>
  3. Can your insurance company cancel your policy without notice?

    Learn about your rights as an insured when it comes to your insurance policy being canceled, including how to access your ... Read Answer >>
  4. Why some insurance policies are more expensive than others?

    There are several reasons that an insurance policy can cost more or less at different agencies. Some of the more common reasons ... Read Answer >>
  5. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  6. What are some examples of when insurance bundling is a bad idea?

    Learn about situations where insurance bundling may not be a favorable option. Bundling insurance is often a good idea, but ... Read Answer >>
Trading Center