Direct writer

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Direct writer
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Direct writer, also called an exclusive insurance agent or a captive agent, is a type of insurance agent who represents only one particular insurance company[1]. In direct writing, no insurance intermediaries are utilized – the insurers focus on mass merchandising of their own insurance products. They employ direct writers who work as the insurer's sales force and represent the company.

The role of the direct writers

The main role of the direct writer is to sell all types of insurance policies, for example:

  • liability insurance,
  • property insurance,
  • health insurance.

Exclusive agents are able to offer their customers the best policy at best price, but only within the range of insurance services offered by one particular company.

The compensation of direct writers

Direct writers, as the employees of an insurance company, are usually compensated with the salary basis plus a commission or bonus for production[2].

Direct writers vs. independent insurance agents

Direct writers offer insurance products of only one insurance agency, therefore they are considered to be less convenient for the potential policyholders than independent agents. Making use of direct writers' services can be inconvenient because of the following reasons:

  • there is no possibility for the potential policyholder to compare several options offered by different insurance companies and to choose the best one,
  • the customer has to go from one company to another in order to compare insurance products available on the market, which makes the process of buying the insurance more time-consuming.

Therefore, it is more convenient to cooperate with independent agents or insurance brokers who represent multiple insurance companies.

Direct writer as a business entity is usually considered to be less effective than the agent who offers insurance products of multiple agencies. Exclusive insurance agents were more popular in the past. In 1990s insurance business began to change: the majority of the companies laid off their agents due to high costs of keeping such a network. Nowadays, freelancers are the most popular form of insurance agents. They want to be as effective as possible, therefore they offer a wide variety of insurance products and they cooperate with multiple insurance companies.

However, it has been proven that independent agents are not always providing the potential policyholders with overall better service quality than direct writers. Although independent insurance agents tend to be more active in claims settlement than exclusive agents, there are different opinions on the quality of the services offered by independent agents in terms of risk analysis and placing insurance applications[3].


  1. Beh H., Willis A. (2008) Insurance intermediaries, “Connecticut Insurance Law Journal”, Vol. 15:2, p.574-579
  2. Outreville J.F. (1998), Theory and Practice of Insurance, Springer Science+Business Media, New York, p.10-11
  3. Eckhardt M.,Räthke-Döppner S. (2008), The Quality of Insurance Intermediary Services –Empirical Evidence for Germany, "Andrássy Working Papers", Vol. XXV, p.11


Author: Marta Łazarz