Definition - What does Direct Writer mean?
A direct writer refers to an insurance company that only issues insurance policies written and serviced by their employees or contracted sub-contractors. In addition, a direct writer could also refer to an insurance agent who only issues insurance policies from a single insurance company. Unlike insurance brokerage firms that typically offer clients a plethora of insurance products from various companies, direct writers only offer insurance products written by their own company or, in the case of an agent, from a single insurance company.
It is also known as a captive agent.
Insuranceopedia explains Direct Writer
Direct writers usually denote insurance companies that do not have independent representatives selling (or writing) their insurance policies. When policyholders need to file a claim or require any service, they contact these insurance companies directly. Thereafter, the employees of this insurance company service the policies.
Similarly, direct writers also denote employees of an insurance company. In contrast, independent agents are typically self-employed individuals who can offer an assortment of insurance products offered by various insurance companies. These independent agents sell insurance policies and make a living off commissions.
It is worth noting that clients working with direct writers might not necessarily get the best deal. However, if these clients purchase all their insurance policies from the same direct writer, they could end up receiving a worthwhile multiline discount.