Just as there are different types of insurance—home, auto, medical, and professional—there are different licensed insurance professionals one can buy insurance through. Agents, brokers, and wholesalers all sell insurance, but there are several distinguishing factors in how they sell. Each of these professionals is regulated by an insurance commission unique to each state and the District of Columbia. These commissions impose rules on marketing and sales and require insurance companies to file financial reports to assess their ability to honor claims.1
Insurance Agent
An insurance agent can represent one or more insurance companies and sells the companies’ policies for a commission. There are captive agents who traditionally represent a specific insurance company and independent agents who may represent more than one insurer. Both types of agents work on commission.1
Although agents generally work on behalf of the insurance provider, they will still help consumers choose the best company for what the consumer may be looking for in insurance coverage.3
Insurance Broker
Like independent insurance agents, brokers can sell policies from different insurance companies for a commission. However, unlike insurance agents, an insurance broker traditionally has a primary duty to the client rather than the company.3 Both insurance brokers and agents can specialize in specific areas within the market, like in commercial insurance or auto insurance. Brokers cannot bind coverage, and they may charge broker fees, which is typically a percentage of commission on the policies sold.1
Insurance Wholesaler4
A wholesale insurance broker acts as an intermediary between a retail broker and an insurance carrier and does not typically work directly with insurance buyers. These brokers usually specialize in one line of coverage, which allows the wholesale broker to have access to unconventional insurance markets like excess and surplus lines. Wholesalers typically specialize in unique and high-risk insurance products, and they shop around to find the best coverage for a particular issue.
One type of wholesaler is known as a surplus lines broker. These brokers can offer products from an insurance company selling non-admitted coverage. In short, wholesale insurance brokers will help find coverage for more specialized or complex risks.
References
https://www.insurancebusinessmag.com/us/guides/what-is-a-wholesale-insurance-broker-118741.aspx.