All Insurance is sold through various channels. Most common channel is Agent Channel and second popular channel is of Brokers who are also licensed by IRDA.
Difference Between Insurance Agent and Insurance Brokers
Agents represent Insurer and work as per guidelines of Insurer. However, Brokers represent customers. They first understand the need then look for suitable Insurer who can provide the right solution.
Who is a broker in Insurance?
Brokers are considered to be experts of Insurance and Risk Management hence they are well suited for large, specialised and bulk business. Broker channel was developed for large General Insurance Business, Group Insurance Business where premium need to be negotiated.
Types of Insurane Brokers Services
Brokers offers four type of services as detailed below:
- Need Analysis and documentation
- Management and reduction of risk
- Negotiate with Insurers for premium and Terms & conditions
- Claim management
Brokers need to have a knowledge on Products, Insurance network and Risk Management. That is why, IRDA has a separate regulations for Broker channel. Each Broker need to comply with all IRDA Regulations through a Principal Officer who clears an IRDA exam after a training.
Benefits of Insurance Broker
- Save time and money. Broker can find out a right match
- Advisory on Risk Management and Mitigation so that your premium can be reduced.
- Brokers are experts and select the best solution and not the most economical solution.
- Specialised needs in General Insurance which need case preparation and premium calculations
- Claim Management and guidance
Who pays to Brokers?
- Brokers are paid by Insurer and Insured need not pay.
- In some special consultancy, Brokers take a fees from Insured also.
Who should use Brokers?
- Mainly suited for Business Houses for their Insurance Needs
- For specialised event based insurances
- Group Insurance which require negotiations
- Specialised risks
Also Read: How Life Insurance agents are mis-selling Insurance Policy?
Insurance Samadhan do not recommend Broker channel for Retail customers who need more education, hand holding and persuasion. There is enough market opportunities for both channels. Agent become accountable to a retail customer and ensure policy persistency in long run. Lot of mis-selling and fraud can be curbed if customers choose their agent after lot of screening, interviews and reference. Customer should not fall to traps of offers of loan, free gifts, gold coins. Customers should be beware of phone calls promises because all these are fake.
Choose your intermediary with lot of consideration if you want to have a peaceful life.
Insurance Samadhan already helped resolve over 13,500 customer grievance cases related to all types of Insurances, ULIPs and other financial products.
To reach us at InsuranceSamadhan.com –
Call us at – 844 844 0626
Mail us at – firstname.lastname@example.org
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