Which agency system involves agents being exclusively tied to one insurance company?

The captive agency system is characterized by agents who work exclusively for one insurance company. This means they are not able to represent multiple insurers and instead focus on promoting and selling products from a single company. This exclusive relationship allows the insurer to maintain control over the sales process and ensures that agents are fully knowledgeable about their specific products, helping them to effectively market and sell those offerings.

Agents in this system receive training and resources from the company, enabling them to develop a deep understanding of the company's policies and procedures. This arrangement also allows the insurer to create a strong brand presence in the market, as captive agents often build long-term relationships with their clients based on trust and consistent service.

In contrast, other agency systems, such as independent agencies or direct writing systems, operate differently. Independent agents represent multiple insurance companies, providing clients with a broader range of options. Conversely, direct writing systems involve insurance companies employing their own agents to sell directly to consumers, not necessarily tying them to exclusivity but instead focusing on company-driven sales.