Carrier Appointment
The formal agreement between an insurance carrier and an agency authorizing the agency to represent and sell the carrier's products.
What It Is
A carrier appointment is the formal authorization granted by an insurance company to an agency, permitting the agency to sell, service, and bind the carrier's insurance products. Appointments define the relationship terms including commission schedules, binding authority limits, and production expectations.
Obtaining appointments requires demonstrating the agency's production capability, financial stability, market expertise, and errors & omissions coverage. Many carriers have minimum premium volume requirements to maintain an active appointment.
Why It Matters for Brokers
Carrier appointments directly determine an agency's market access and competitive capability. The breadth and quality of carrier appointments defines what risks an agency can write and at what price points. Managing appointments requires ongoing attention to production requirements, loss ratios, and compliance. Carriers regularly review agency performance and may terminate appointments for underperformance.
Real-World Example
A growing agency applies for appointment with a preferred carrier known for competitive commercial auto rates. The carrier requires $250,000 in annual premium within the first 18 months and a combined loss ratio under 55%. The agency develops a targeted marketing plan to meet these production requirements.
Common Mistakes
- 1Not tracking minimum production requirements for each carrier
- 2Failing to diversify appointments leaving the agency dependent on too few carriers
- 3Not reviewing commission schedules and contingent commission structures annually
- 4Missing carrier compliance requirements like E&O coverage minimums
How brokerageaudit.com Handles This
BrokerageAudit tracks carrier appointment status, production requirements, and performance metrics, alerting you to appointments at risk of non-renewal.