LOA vs. Independent Insurance Agent: What’s the Difference?

The short version

A captive or LOA (Letter of Appointment) agent writes business under someone else's agency. You use their contracts, their carriers, and often their leads — and in exchange, the agency keeps ownership of the book you build. An independent agent owns the book, keeps the renewals, and can place business with many carriers. The difference isn't your effort. It's who ends up owning what your effort creates.

What is an LOA or captive contract?

“LOA” stands for Letter of Appointment. In practice, being an LOA or captive agent means you're appointed to sell under an agency's or a single carrier's umbrella. The upside is that it's an easy on-ramp: training is provided, leads may be handed to you, and you don't have to get appointed with carriers yourself. The trade-off is control. The agency typically owns the client relationships, controls which products you can sell, and sets a commission split that favors the house.

Three things usually come with the territory:

• The agency owns the book. Your clients are booked under the agency's name, not yours.
• Renewals stay behind. If you leave, the recurring income you built often stays with the agency.
• A non-compete may apply. Many captive agreements limit who you can contact and where you can work if you leave.

What is an independent insurance agent?

An independent agent runs their own practice. You hold your own carrier appointments (or access them through an independent marketing organization), you own your client relationships, and your renewals keep paying you for as long as those policies stay on the books. You decide which carrier is the right fit for each client instead of being limited to one shelf of products.

Independence does require more ownership of the business side — getting appointed, running your pipeline, handling compliance — but that's exactly the part a good independent platform helps you with, without taking your book in return.

LOA vs. independent: the differences that actually matter

1. Who owns the book of business

This is the big one. As a captive or LOA agent, the book is the agency's asset. As an independent, it's yours — which means it has transferable, sellable value when you're ready to retire or step back.

2. Renewals and residual income

Renewals are where real wealth gets built in insurance. Independents keep them. Captive agents frequently forfeit them the day they walk out the door.

3. Carrier access

Captive agents sell what they're given. Independents shop the open market, which usually means better fits for clients and higher retention.

4. Commission

Independents generally earn the full commission they negotiate. Captive splits quietly route a share back to the agency.

5. Non-competes

Independence means you control your career. No one decides for you how far you're allowed to go.

Which one is right for you?

If you're brand new, have no leads, and need structure while you learn, a captive or LOA seat can be a reasonable starting point. But if you're already producing — if you can sell and you're simply handing the long-term value of that work to someone else — the math starts to favor independence fast. The question to ask yourself is simple: am I building an asset I own, or renting my license to build someone else's?

This article is general educational information for licensed insurance professionals, not legal or financial advice. Your own contract controls your specific situation — review it carefully, and when in doubt consult a qualified attorney.