Are Captive Agents Writing PAP’s Doomed?

The personal package policy of auto and homeowner’s insurance has been the bread and butter of the captive and direct writer insurance companies for decades.  It has been a great product for both the carriers who can use multi line premiums to bolster balance sheets and improve retention and for the customer who gets discounts for placing more business with the carrier.

Unfortunately for the carriers, and their agents, the ease of doing business on the web and the use of smart phones for purchases is sounding the death knell of this business practice according to a recent article in Best’s Review.  As customers are more easily able to compare pricing online, and auto insurance particularly becomes commoditized the delinking of home and auto will be commonplace.

This has profound ramifications for all personal lines agents.  But it represents a significant disadvantage for captive agents because they can only sell one product line.  The result according to Best will be a decline in the number of captive agents as they transition to becoming independent agents in order to represent multiple carriers.

Is it a good time to move from the captive to independent insurance system?  You be the judge but the answer seems obvious to me.