Intermediary mandated by a single insurer, or a small number, to distribute its products in its name, as opposed to a broker which is mandated by its client.
The difference between a tied agent and a broker is not commercial but legal, and it decides who answers for what. The agent is the insurer's mandatary: it acts in the insurer's name, binds its signature within the mandate's limits, and its faults in exercising that mandate bind the insurer. The broker is its client's mandatary: it acts for the client, must run a market comparison, and answers for its advice with its own assets and its own professional liability cover. The consequence for the insured is direct: a tied agent has no obligation to compare market offers, since it represents only one company, while a broker does. The model remains structural in several European markets, notably France and Germany, where agency networks carry a large share of personal and small business insurance. Its strength is loyalty and moderate acquisition cost; its weakness is a limited offering, which competition from comparison sites and bancassurance has made visible to customers.
In France the status of insurance general agent rests on an appointment agreement concluded with a company, and an agent entered in the intermediaries register appears there under a category distinct from that of broker. The difference in mandate decides, in case of bad advice, whether the insured turns against the company or against the intermediary itself.
tied agent, agent général d'assurance, mandataire d'assurance, réseau propriétaire