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What Is an Agent of Record (AOR)?

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Key Takeaways

1. An agent of record (AOR) is an individual or entity that is legally authorized to represent a company in selecting and managing an insurance policy on its behalf.

2. The responsibilities of an AOR can include handling policy renewals and changes, submitting claims, negotiating settlements, and acting as a point of contact between the insured and the insurance company.

3. Some of the benefits an AOR can offer a business include expert advice and time and cost savings. However, choosing an AOR may restrict the insurance choices available to a company as well as create an overreliance on its services.

4. An AOR is sometimes referred to as a ‘broker of record’.

It is common practice for companies to hire an AOR when it comes to the administration and management of their insurance coverage. Without the need to deal with such matters themselves, businesses can focus on their core activities knowing their insurance needs are being taken care of. An AOR can also be used by a PEO to handle certain tasks related to managing employee benefits or arranging PEO insurance coverage for its client companies.

This article will look more closely at the role of an AOR and will discuss some of the pros and cons of choosing one for your business.

What is the definition of an “agent of record”?

An AOR sometimes referred to as a ‘broker of record’, is a company or individual that is legally authorized to represent the insured in the purchase and management of their insurance policy. An AOR can also help a company evaluate and select appropriate employee benefits including health insurance, life insurance, and retirement plans.

As a legally authorized representative of the company, an AOR will deal directly with the insurance company and will receive all communications on behalf of the policyholder enabling it to carry out its duties which include handling policy renewals and changes, submitting claims, negotiating settlements and representing the policyholder in dealings with the insurance company.

An AOR is typically designated by the insured in writing through a letter of appointment and the insured may change their AOR at any time by submitting a revised letter to the insurance company authorizing the release of information and handling of their insurance coverage with the newly designated AOR.

It is worth noting there are competing definitions of an AOR and it is sometimes used to describe a company that manages independent contractors who assume responsibility for all payment, regulatory, and tax matters in compliance with the country they are working in. For the purposes of this article, an AOR will be an agent for insurance purposes only.

What are the pros of choosing an Agent of Record?

Companies use an AOR for a variety of reasons. Below are some of the pros of choosing such as agent for your business:

  • Expert advice
  • An AOR can provide your company with expert advice on its insurance needs helping it determine the types of coverage it needs based on its unique risks and exposures. This is especially helpful for relatively new areas such as health insurance for remote workers where companies are being called to create such packages in order to hire and retain the best talent. By comparing insurance policies from various providers an AOR can help you find the most appropriate policy for meeting your business needs at the most competitive price.
  • Time and cost savings
  • In addition to arranging the most cost-effective insurance coverage an AOR can save your business time by handling administrative tasks such as policy renewals, changes to coverage, maintaining all insurance records, and ensuring the coverage is up-to-date. When it comes to the submission of a claim an AOR can handle the process on your behalf by gathering all necessary documents and communicating with the insurance company to ensure the claim is dealt with and processed fairly and efficiently. By delegating such matters to an AOR your company is able to focus on more strategic aspects of its business.
  • Advocacy
  • As the primary point of contact between your company and your insurer, an AOR can represent your business in all insurance-related dealings which include managing all negotiations and advocating on its behalf if any issues, claims, or disputes arise to ensure your company receives a fair outcome.
  • Convenience
  • An AOR makes it easier for your company to manage its insurance coverage and deal with any questions, concerns, or issues which may arise. As the single point of contact for your business, an AOR can coordinate the process of arranging the most suitable insurance policy for your business, provide the requisite information in the event of a claim and successfully handle the claims process on its behalf.
  • Peace of mind
  • Having an AOR oversee all insurance-related matters such as non-mandatory benefits for employees can provide peace of mind for your business knowing its insurance coverage and that of its employees is compliant and effective and is being handled by a professional who has its best interests in mind.

What are the cons of choosing an Agent of Record?

Below are some of the potential drawbacks to hiring an AOR:

Limited choice

You may limit your options in terms of insurance providers if you choose an AOR as some only work with specific insurance companies. This not only limits your coverage options but also your ability to choose the most competitive price on the market.

Higher costs

In addition to potentially paying more for your insurance coverage due to a lack of options, your overall costs of insurance could be higher due to additional fees charged by some AORs.

Inadequate coverage

There is the risk that an AOR may not fully comprehend the specific needs and risk profile of your business resulting in them selecting and purchasing an insurance policy that provides inadequate coverage. Periodically reviewing your company’s insurance policies to ensure they continue to serve the needs of your business can help to mitigate this risk.


Reliance on a single provider to arrange your insurance needs can be problematic if they are no longer available to provide this service or choose to leave. It is also important for a business to have an understanding of its own insurance needs and to be proactive in selecting the right insurance provider as overreliance on an AOR to make all insurance-related decisions can lead to oversights and the inability to make informed decisions about the coverage they need.

A final word…

Horizons can support your business in offering a comprehensive health insurance package for its employees anywhere in the world. Contact us today to find out more.

Frequently asked questions

Yes, an agent of record (AOR) is also known as a ‘broker of record’ as both are appointed on behalf of an insured to act as their representative in dealings with an insurance company.

An employer of record (EOR) manages the foreign employment relationship on behalf of a company ensuring compliance with local employment laws and regulations, whereas an agent of record (AOR) is responsible for managing insurance coverage and handling claims or issues that may arise on behalf of the EOR’s clients.

Hire and pay talents
with Horizons in
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