Understanding the basic differences among the variety of producers makes it simpler to describe the many different ways that field sales operations are organized (the number of agents declined 19% over the 1991�1996 period):
- Ordinary agents are producers who devote at least 75 percent of their time selling primarily individual life products for one company that generally provides financing, training, supervision, sales support, and office facilities (also called housing). There are approximately 108,800 ordinary agents, and their share of new life premiums is 41 percent.
- Home service agents are producers who spend at least 75 percent of their time selling ordinary and industrial individual life for one company that provides financing, training, supervision, sales support and office facilities. These agents sell in an assigned territory called a debit and sometimes collect premiums at the insured�s house or office. There are approximately 17,700 home service agents, and their share of new life premiums is 5 percent.
- Multiple-line exclusive agents are producers who sell individual life as well as property and casualty products for one company that provides financing, training, supervision, sales support, and office facilities. There are approximately 66,000 multiple-line exclusive agents and their share of new life premiums is 11 percent.
- Personal-producing general agents (PPGAs) are producers who receive both a producer�s commission and the overriding commission that would usually go to a manager or general agent on personally produced business. Many are single-individual operations but some PPGAs hire and support subproducers. PPGAs typically have contracts with several companies but often have a primary company relationship. They sometimes have to maintain a minimum production level to keep these contracts. There are approximately 25,000 PPGAs and their share of new life premiums is 15 percent.
- Brokers are full-time insurance producers who work independently and have no primary relationship or minimum production requirements with any company. There are two important distinctions between brokers and PPGAs: Brokers do not receive overriding (general agent) commissions, and there is neither a tendency nor an intent for the company to achieve a primary-carrier status with brokers.
- Independent agents are primarily property and casualty producers who have no primary relationship with a company. Brokers and independent agents who sell life insurance total about 75,000, and their share of new life premiums is 27 percent, the bulk of that going to brokers.
- Financial planners are producers who can usually be placed in one of the categories above. Although there is no agreed-upon definition of financial planners, it is usually understood that they provide clients with a total financial plan that includes everything from investments to insurance. Financial planners were at one time described as the wave of the future, but the popularity of the idea waned in the late 1980s. They are now decreasing in number, and those remaining are more open to specializing in a particular area of planning�most often, life insurance. About 12,000 producers call themselves financial planners.
- Stockbrokers should be included among producers because there are about 25,000 of them who sell some annuities, single premium life, and variable products.
- Super producers are a special kind of producer�one with sophisticated product knowledge and technical support. They represent about 7 percent of the entire field force, and a major segment of this group are the "superagents" of the life insurance�those with whom we associate producer groups and producer-owned reinsurance companies. Although all super producers would fall into one of the categories above, they really represent a distribution system within a distribution system simply because they are different, with their special compensation arrangements, joint case work, country-wide partnerships, equity ownerships, influence on product development, technical expertise, shared knowledge, and even proprietary software.