General Agency System
What Does General Agency System Mean?
A general agency system is a setup in the insurance market where an individual or entity sells insurance products to agents and brokers within a specific area. This entity may represent one insurance company or multiple companies.
Insuranceopedia Explains General Agency System
The general agency (GA) works for one or more insurance companies, which can be advantageous for these companies, as the GA is paid only for the insurance products it successfully sells. Additionally, the GA can handle preliminary underwriting activities on behalf of the company and is responsible for marketing the insurance products in a designated area.
The agency reaches out to agents and brokers in the area to sell insurance products. Instead of paying them fixed salaries, the agency compensates them through commissions on the policies sold.
