Independent vs. Multinational Insurance Companies – Pros and Cons of Each

If you own a car, home, commercial building, or business, you’re likely familiar with insurance logistics and costs. But when it comes down to choosing which type of insurance company to purchase from, you may be a little lost or overwhelmed. The first choice you’ll need to make when deciding where to purchase insurance is whether to choose a large, multinational company or a small, independent insurance agency. Below are a few of the pros and cons of each option.


Multinational Insurance Companies


Global reach: Multinational insurance companies are a good option for individuals who may have insurance needs in multiple countries; for instance, a business with locations around the world. Some large insurance companies are equipped to provide coverage in up to 200 countries. These kinds of resources are important if you are planning to expand a business on a global scale, or your own properties internationally. This factor is less important for individuals who will only need local coverage.    

Reliability: Many larger, multinational insurance companies have been around for 50 years or more, and some customers like to see a long track record of success before choosing an insurance provider. While older companies aren’t necessarily more reliable compared with newer ones, their history of successful insurance services can be reassuring. Unfortunately, as we discuss below, larger firms can sometimes charge more for this reassurance!      


Lack of local market expertise: The flip side is that many large multinational firms don’t have extensive local market knowledge in your area, and you may miss out on the best prices if your insurance needs are centralized in a specific domestic area.

Cost: Many local businesses will offer more competitive rates, so going with a larger firm may cost you more in the long-term. If you don’t need the specific services that multinational companies provide (i.e. international coverage), it may make more sense for you to go with an independent firm.


Independent Insurance Companies


Customization and personalization: The main advantage of independent insurance agencies is that you have the ability to choose the best specific carrier for your insurance needs; representatives from independent agencies will work with you to personalize your plan. Rather than more general insurance package options that serve a broader customer base, independent agencies offer more specific and flexible options.

Local expertise: Smaller agencies have more extensive knowledge about the local area they are located in, and they carefully select their local carriers in order to provide customers with the best coverage.

Cost: Smaller, independent firms are able to remain competitive on a local scale because they are dedicated to providing customers with coverage at the most competitive rates. This is good news for the customers!


Local restrictions: As mentioned, if you are a multinational business owner looking to expand on a global scale, a smaller independent agency might not have all the resources to meet your needs. Global operations are a bit more complicated in terms of coverage; you’ll need to ensure that your business will be covered in the event of a global disaster, which independent firms often can’t provide.