Marketing enables an insurance company to determine which products meets customer needs and then to sell and deliver those products to its customers. It is a process of identifying customers and their needs and then creating, pricing, promoting, selling and distributing products or services to meet those needs.
A Producer is any person who sells insurance products for an insurance company. However, agent, broker, sales representative and other titles are also used to denote special category of producer.
The Legal Role of an Insurance Agent
Agency is a legal relationship that is formed when one party, the principal, authorizes another party, the agent to act as a legal representative of the principal. In the agency relationship, the principal is the party that authorizes the agent to act on its behalf. In agency relationship, the agent is the party that is authorized by the principal to act on principal’s behalf.
Creation of Agency Relationship
An agency relationship is usually created by written contract between principal and the agent. In insurance, the insurance company is the principal that appoints insurance agents to serve as its representatives; a written agency contract specifying the scope of the authority given to an agent formalizes this relationship.
An Agency Contract or Agency Agreement is a written agreement between the insurance company and the agent that specifies, among other things, the scope of the agent’s authority to conduct business for the insurer.
Insurance Agents are legal representatives of the insurance company for which they have contractual agreement to sell insurance.
CHAPTER 4 - MARKETING