What is the primary function of the insurance agency in relation to the insurance company?

The primary function of the insurance agency in relation to the insurance company is to represent and sell insurance solely for that insurance company. This relationship is crucial because the agency acts as the intermediary between the insurance company and the customer. Agencies are contracted to sell policies and find clients on behalf of the insurer, effectively allowing the insurance company to reach a broader market without having to deal directly with all potential customers.

Agencies often have extensive knowledge of the insurance products they represent, which helps them identify the appropriate coverage options for clients. This representation creates an essential distribution channel for insurance companies to grow their business.

In contrast, negotiating premiums directly with customers, providing legal advice regarding insurance claims, or developing insurance products are roles typically outside the scope of what an insurance agency does. While some agencies may offer limited guidance or consultative support, their core function remains focused on selling insurance on behalf of the partnering insurance company.