What Is An AOR? A Complete Guide

Choosing and managing insurance policies is a time-consuming, detail-heavy process. From picking the right plans to handling renewals, claims, and compliance paperwork, there’s a lot that can fall through the cracks, especially as your company grows.

That’s where an AOR comes in.

What Is An AOR?

An Agent of Record is a licensed individual or organization that has the legal authority to manage your insurance policies. Instead of juggling multiple providers or brokers yourself, you work with your AOR as your main point of contact.

They help you select plans, negotiate better rates, handle claims, and make sure your coverage aligns with your business’s needs over time. 

Nowadays, the term has evolved to cover companies that help businesses hire and manage international contractors.

In this guide, we’ll walk through why companies use AORs, how the process works, key benefits, downsides to consider, and how to pick the right AOR partner.

Let’s get into it.

Why Use An EOR?

Working with an AOR offers much more than just outsourcing paperwork. A strong AOR relationship can streamline operations, reduce risks, and give you a more strategic handle on your insurance coverage long-term.

Here’s how:

Policy management made simpler

Managing multiple policies across different carriers gets complicated quickly, especially when it’s time to renew or update coverage. An AOR consolidates everything under one roof.

They oversee plan selection, help with renewals, negotiate rates, ensure policy compliance, and coordinate directly with insurers. Instead of you or your HR team chasing down documents, updates, or certificates, your AOR acts as your day-to-day liaison. 

For companies with complex or evolving insurance needs, like adding new locations, offering more benefits, or scaling quickly, having someone manage this process can save hours every month.

Stronger risk assessment and mitigation

Insurance isn’t just about protecting what you have today. It’s about anticipating potential risks as your business grows.

Good AORs don’t just pass along plan options. They work with you to assess your risk exposure, spot coverage gaps, and proactively recommend changes. Whether it’s ensuring cyber insurance is keeping up with your digital footprint, or adjusting workers' comp as you expand into new states, an AOR helps you stay ahead of the curve.

This strategic guidance is a big reason why many mid-sized and growing companies work with AORs rather than juggling multiple brokers independently.

Claims advocacy when it matters most

When a claim arises, speed and accuracy matter. A good AOR doesn’t leave you alone to figure it out.

They coordinate directly with the insurance carriers to manage claims paperwork, advocate on your behalf, and push for faster resolutions. This can be the difference between a quick payout and a long, painful battle with insurers, especially in complex claims involving multiple parties or policies.

In industries like construction, healthcare, and tech (where specialized insurance policies are common), this advocacy can save companies significant time, money, and stress.

Tailored coverage recommendations

Every business evolves, and so do your insurance needs.

A quality AOR doesn’t just set up a policy and disappear. They monitor changes in your business, like new hires, location moves, revenue growth, or new lines of service, and recommend coverage adjustments accordingly. 

This ensures you’re not overpaying for outdated plans or leaving yourself exposed to new risks. It’s ongoing, proactive management rather than reactive scrambling when something goes wrong.

How Does The AOR Process Work?

At its core, the AOR process is about giving a licensed agent or broker the authority to manage your insurance policies directly with the carrier. While it can feel administrative on the surface, a strong AOR relationship often becomes one of the most important parts of protecting your business.

According to Andrew Lokenauth, a finance expert who has used them extensively at his past jobs at big banks, 

“The AOR process isn't actually that complex (though some brokers try to make it seem that way). From my experience handling this at two different banks, here's how it typically flows:

First, you'll need to draft and sign an AOR letter — basically telling your insurance carriers that you're appointing this broker to represent you.

I remember doing this at my previous bank and it took maybe 15 minutes tops. Just make sure legal reviews it. Next, your new broker will reach out to all your carriers to get your policy info transferred over. 

This part can be a pain — when we switched AORs at my current bank, it took about 3-4 weeks for everything to get moved. Some carriers were quick, others dragged their feet. The final step is having your new AOR do a coverage review. 

In my case, they found about $50K in premium savings pretty quickly by consolidating some overlapping policies we had.”

Here is a practical breakdown of how the process typically works:

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1. Choosing your agent or broker

The first step is identifying the agent or broker you want to work with. Some businesses work with brokers who have already provided advice informally, while others actively search for a new AOR based on expertise, industry focus, or stronger carrier relationships.

This decision matters. A good AOR is not just about finding you cheaper premiums, they become the person who negotiates coverage terms, advocates for you during claims, and helps structure your insurance portfolio as your business grows.

2. Signing the AOR letter

Once you select your agent, you formalize the relationship by signing an Agent of Record (AOR) letter. This tells your insurance carrier that your new agent has the right to represent you. After this, the carrier will only communicate about your policies through your appointed AOR.

At this stage, nothing about your coverage or carrier changes automatically. Your agent simply takes over servicing your existing policies, unless you decide to make changes after reviewing your needs.

3. Carrier confirmation and access

After submitting the AOR paperwork, the insurance carrier reviews and acknowledges the change. Processing times vary between carriers, but it typically takes a few business days.

Once confirmed, your AOR gets full access to your policy details. They can begin the real work of assessing whether your current insurance program is the best fit for your risks.

Practical tip: Make sure to stay in close contact with your new AOR during this time. Some businesses mistakenly assume everything is handled once the AOR letter is signed, but the best results happen when you collaborate actively with your agent in the early stages.

4. Policy review and recommendations

With access to your policy data, a good AOR will review your coverages, exclusions, endorsements, and pricing. They will look for gaps, overlaps, and opportunities to improve protection without unnecessary costs.

This is a crucial point of difference. A strong AOR does not just maintain the status quo. They should challenge whether your insurance strategy still fits your business, especially if you have grown, added new services, or expanded into new regions.

5. Ongoing management and claims advocacy

After onboarding, the AOR manages your policies day-to-day. This includes handling renewals, preparing for audits, making adjustments as your needs change, and helping navigate any claims that arise.

Good AORs are proactive. They remind you of important deadlines, flag risks early, and bring alternative options to the table rather than waiting for issues to become problems.

Benefits Of Working With An AOR

An AOR can potentially save you time, money, and maybe a headache or two:

1. Time and resource savings: Managing insurance policies across different carriers and lines of coverage can be extremely time-consuming. An AOR handles the coordination, communication, and paperwork for you, freeing up your internal team to focus on other priorities. Lokenauth’s previous broker would wait til 2 weeks before renewal to start the process, leading to unnecessary stress. Their current AOR starts 120 days out.
2. Peace of mind: With an AOR overseeing your insurance program, you can operate with the confidence that your coverage is being actively monitored and managed. They keep track of renewals, endorsements, compliance updates, and claims so you are not caught off guard.
3. Expertise and advocacy: AORs bring technical insurance knowledge that most businesses do not have in-house. They can explain complicated policy language, recommend improvements, and advocate for your best interests during negotiations or claims.
4. Convenient representation: Instead of contacting multiple carriers individually, you deal with one point of contact. This makes policy changes, claims reporting, and day-to-day service much more streamlined and efficient. Many AORs integrate with platforms like Rippling or Gusto, so your insurance management is tied directly into your payroll and onboarding tools. That centralization can save hours every month.
5. Personalized coverage: Good AORs do not just place standard off-the-shelf policies. They take the time to understand your business's specific risks and needs, tailoring your insurance program accordingly to provide better protection.
6. Proactive risk management: Many AORs go beyond just placing policies. They help you identify emerging risks, suggest risk mitigation strategies, and work with carriers to structure programs that align with your long-term business goals.

Potential Downsides Of Using An AOR

While the benefits are there to be had, there are some potential downsides to consider:

1. Limited options: Some AORs have preferred carrier relationships, which can limit the number of quotes or solutions they bring to you. You might miss out on certain niche policies or competitive alternatives if your AOR has a narrow market reach.
2. Potential conflicts of interest: Because some AORs receive higher commissions from specific carriers, typically ranging from 10% to 20% of the premium, there can be a risk that recommendations are influenced by incentives rather than by what is strictly best for you. It is important to work with transparent agents who disclose your options fully.
3. Dependency: Over time, you might become heavily reliant on your AOR for all insurance-related matters. If your AOR is not proactive or communicative enough, it can leave you exposed or unaware of critical gaps in your coverage.
4. High costs: While the AOR fee is often built into the insurance premiums, it is still a cost to be aware of. For example, commissions for health insurance policies can range from 3% to 8% of the premium. In some cases, AORs may also charge additional fees for specialized services or consulting. If your AOR is not adding enough value through better pricing, service, or expertise, the cost may outweigh the benefit.

AOR Pros and Cons

Here’s a quick snapshot of the main pros and cons of working with AORs:

Pros	Cons
Saves time and internal resources	May limit access to certain carriers
Provides expert guidance and claims support	Potential conflicts of interest with insurers
Offers peace of mind through active policy management	Risk of over-dependence on one AOR
Tailors insurance coverage to specific business needs	Additional fees or hidden costs are possible
Simplifies communications with insurers

How To Choose An AOR

Choosing the right AOR is critical to protecting your business and getting the most out of your insurance and benefits plans. 

You’re not just picking someone to file paperwork, you’re choosing a partner who will help you stay compliant, manage risks, and build a benefits strategy that actually supports your team and growth.

As Jessica Jimenez, Senior Compliance Director @ Atrium, explains:

 "An AOR partner should do more than just connect you to plans. They should guide you through the different insurance rules in each state, help you avoid compliance gaps, and offer a clear strategy to optimize your coverage and costs over time. The differing regulations between states, and your AOR’s support in that area can be a make or break factor. Without a strong AOR, it is easy to end up overpaying or missing important legal requirements as you grow."

In short, a good AOR is an advocate, not just a middleman. Here’s what to evaluate when choosing one.

What to look for in an AOR partner

Expertise with companies like yours

Insurance needs can vary drastically based on company size, structure, and industry.

• Look for an AOR who has experience supporting companies similar to yours, whether that means early-stage startups, remote-first teams, or companies in highly regulated industries.
• Ask about the stages of growth they have navigated with clients and how they have adapted benefits strategies as companies scale.

According to Lokenauth, “Size isn't everything. We originally went with one of the huge global brokers thinking bigger = better. Big mistake. We were too small for them to care about — couldn't even get our account exec on the phone half the time.

What I look for now: Industry expertise (they need to understand banking regulations), dedicated service team (not getting passed around), and tech capabilities. Having an actual portal where I can access all our certs & policies saves me hours every month.”

Access to competitive plans

Your AOR should offer more than just one or two options.

• They should give you access to a wide range of insurance plans, including PPOs, HMOs, HDHPs, and supplemental benefits, to fit different employee needs and budgets.
• A strong AOR will have relationships with top insurers and should be able to negotiate better pricing or more flexible terms on your behalf. Andrew Lokenauth saved about 15% on his D&O renewal because their AOR could credibly threaten to move markets.

Compliance knowledge

Insurance compliance is complex and varies by state, industry, and company size.

• Choose an AOR that actively tracks evolving regulations like ACA requirements, COBRA rules, ERISA obligations, and state-level mandates.
• More importantly, they should translate compliance needs into practical steps for your company without overloading you with technical language.

Support and service

Working with an AOR should feel like having an extension of your internal team.

• Confirm that you will have a dedicated representative or account manager who understands your business and employees' needs.
• Good AOR partners also assist with onboarding materials, Q&A sessions for employees, and support during claims or life events like adding dependents.

According to Oliver Morrisey, Owner of Empower Wills & Estate Lawyers, “We evaluated a few agents for our business by checking their ability to offer timely advice and support. We prioritized their responsiveness and personal attention to detail, and found that a more proactive AOR who stays on top of policy changes and regulations is invaluable.”

Tech integration

Technology is essential for smooth benefits management, especially for distributed teams.

• Your AOR should be able to integrate with leading HR and payroll platforms like Gusto, Rippling, BambooHR, or Justworks, making the experience seamless for both HR and employees.
• Ideally, employees should be able to enroll, make changes, and access information themselves through a simple platform, reducing manual work for your team.

Scalability

As your company grows, your insurance needs will evolve.

• A good AOR partner will be ready to help you expand into new states, adjust plan options, or add new benefits like dental, vision, life insurance, and mental health coverage as needed.
• They should be proactive about recommending adjustments, not reactive only when you ask.

Transparent fees

There should be no mystery about how your AOR is compensated.

• Some are paid by commissions from insurers, some charge flat fees, and some do both, but either way, the structure should be explained upfront.
• Ask for a clear breakdown of any administrative costs, service fees, or hidden charges so you can make an informed decision.

Lokenauth says, “Transparency about compensation is non-negotiable for me now. Our first AOR was making undisclosed commission overrides that we only discovered during an audit. These days, I require full disclosure of all revenue streams up front.”

Questions to ask a potential AOR

• What insurance carriers do you work with? - Gauge how much choice you actually will have
• How do you help us with employee onboarding and education? - Effective onboarding ensures employees understand and use their benefits properly.
• What’s your approach if a claim or coverage issue comes up? - You want an AOR who will advocate for you and solve problems, not leave you dealing with insurers alone. Ask for recent examples if possible.
• Do you offer benchmarking so we know how our benefits compare? - Benchmarking helps you stay competitive in attracting and retaining employees.
• How fast can you pivot if we want to add/change plans? - Flexibility is key if your company’s needs change suddenly.

What Is An Agent Of Record Letter?

An Agent of Record (AOR) letter is a formal document that authorizes a specific insurance agent or broker to manage your insurance policies on your behalf. It tells the insurance carrier that the agent you have appointed is now your official representative for that policy. 

Once the letter is signed, the AOR can access your policy details, negotiate coverage, make changes, and advocate for your best interests with the insurer.

This letter is essential because insurance carriers typically work only with the agent listed on file, not directly with the client.

Reasons To Terminate An AOR Agreement

You might consider terminating your AOR relationship for several reasons:

• Lack of Service Quality: If your agent is slow to respond, not proactive in policy management, or provides poor support, it might be time for a change.
• Better Options Elsewhere: You may find another agent with broader carrier access, better pricing, or more specialized expertise in your industry.
• Limited Carrier Access: If your current AOR cannot offer you policies from a wide range of insurers, you could be missing out on better coverage or rates.
• Conflicts of Interest: If the agent prioritizes carrier relationships over your best interests, it can compromise the advice and solutions you receive.
• Changes in Your Business Needs: As your company grows, you may need more sophisticated insurance solutions that your current agent is not equipped to handle.
• Poor Claims Advocacy: If your agent does not actively support you during the claims process, you may want someone who will advocate more effectively.

Do I Need An AOR For My Global Team?

Use this quick checklist. If you answer “Yes” to three or more questions, it probably makes sense to work with an AOR:

• Do you have employees or contractors working across multiple countries?
• Are you managing different types of insurance policies (health, liability, workers’ compensation) across regions?
• Are you finding it hard to stay compliant with local insurance regulations in every country you operate in?
• Is your internal team spending too much time managing renewals, claims, and policy updates?
• Are you unsure if your current coverage fully protects your overseas workforce?
• Have you experienced claims issues or delays because of paperwork or policy misunderstandings?
• Are you planning rapid international expansion and need scalable insurance solutions?

If you checked three or more, an AOR can help simplify your insurance management, bring in expertise, and free up your internal resources. 

Lokenauth also added, “So I've been through this selection process twice now, and I've learned what really matters (and what's just sales fluff). Size isn't everything. We originally went with one of the huge global brokers thinking bigger = better. Big mistake. We were too small for them to care about — couldn't even get our account exec on the phone half the time.

What I look for now: Industry expertise (they need to understand banking regulations), dedicated service team (not getting passed around), and tech capabilities. Having an actual portal where I can access all our certs & policies saves me hours every month.”

Ultimately, whether you need an AOR comes down to the complexity of your operations and how much risk you are willing to manage internally.

Agent Of Record Vs Employer Of Record (EOR)

It’s easy to confuse AORs with EORs because both services help companies manage employment or contractor relationships. However, they serve very different purposes. 

While an AOR focuses on insurance policy management, claims, and risk assessments, an employer of record service handles all aspects of employment, including payroll, taxes, compliance, and benefits.

Below is a simple breakdown of their differences:

Feature	Agent of Record (AOR)	Employer of Record (EOR)
Primary Role	Manages insurance policies, claims, and risk assessment	Manages payroll, taxes, compliance, and full employee benefits
Focus	Insurance-related services	Employment-related services
Legal Responsibility	Does not take on legal liability for workers or contractors	Legally employs workers and assumes liability
Types of Work Managed	Insurance, claims advocacy, policy negotiation	Full employment management, from hiring to firing
Ideal For	Companies needing expert insurance and risk management	Companies hiring full-time employees or managing international teams
Global Reach	Limited to insurance needs	Handles global employment compliance and tax concerns

For more detail, you can read more in our article EOR vs AOR.

The Evolving Role Of AORs

While traditionally used in the insurance sector, the term “Agent of Record” has evolved in recent years. 

In the context of managing contractors, "AOR" is often now used interchangeably with "Contractor of Record" (COR)—a tool to manage international contractor hiring, compliance, and payments.

However, it’s important to remember that an AOR, in the insurance sense, is about managing insurance, not handling employment contracts or payroll, which is the domain of the EOR. For a comparison of the contractor management AORs with EORs, refer to this article.

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An Agent of Record (AOR) can be a valuable partner in managing insurance policies, staying compliant, and accessing better coverage options.

The key is choosing one that understands your company’s size, industry, and future plans. Look for expertise, transparency, strong carrier relationships, and a proactive approach to compliance.

While the term AOR has evolved over time, in the insurance context, it is still about finding a partner who acts in your best interest.

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