Employee Benefits

What Is an Insurance Carrier?

3 min read Dec 15, 2022

An insurance carrier is a company that creates and manages insurance policies and is typically the financial resource behind them.

What does an insurance carrier do?

Insurance is provided by an insurance carrier that is responsible for underwriting insurance plans and issuing payments for claims. Note: There are cases in which a carrier may not be financially responsible, but instead serves as an administrator of insurance policies. In these instances, the employer offering the coverage manages claims.

Here’s a basic overview of how the process works: You (or your employer) pay an insurance carrier for an insurance policy. This insurance policy covers your healthcare or assets up to a certain amount. When something happens to you or the relevant asset, you submit an insurance claim explaining the situation. Your carrier is then responsible for paying some or all of the damages.

Other names for insurance carriers

The term insurance carrier has a few synonyms that you can use interchangeably:

  • Insurance carrier
  • Insurance company
  • Insurance provider
  • Insurer

However, it’s important to note that certain terms are not synonymous with insurance carrier. Insurance agencies and brokers are two major players in the insurance industry, but neither are carriers.

What is an insurance agency?

Insurance agencies and insurance agents sell policies. Insurance carriers hire and contract independent agencies to sell their insurance products. They can work for one or multiple carriers at a time, depending on the contracts. Insurance agents work on commission, so they get a cut of whatever they sell.

Because of their contracts, they technically work for the carriers. Agents have a deep understanding of the insurance coverage that the carriers they represent provide. However, they are not responsible for helping to assess personal or business risk. That’s where insurance brokers come in.

What is an insurance broker?

Insurance brokers help facilitate insurance policy sales. They collaborate with insurance carriers, but they don’t work for them.  For example, an employer would hire a broker to help them purchase insurance for their employees from a carrier.

Insurance brokers are third parties that also work on commission. They are often experts in risk management that can help clients explore coverage options.

It’s important to know who your insurance carrier is and how to file a claim. But it’s also important to know who you’re talking to and their roles. Keep in mind, if you’re enrolling in benefits through your workplace, you’ll communicate directly with your employer and manage your claims with your carrier.

Everything you need to know to protect you and your family.

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This article is intended to provide general information about insurance. It does not describe any Metropolitan Life Insurance company product or feature.