What does an insurance broker do?
24 May 2021
Typically working for a third party insurance brokerage firm or financial advisors, it is the job of an insurance broker to find affordable yet financially logical insurance policies for their clients, using an in-depth knowledge of their specific market, current trends and possible risks. Ultimately, insurance brokers find, arrange and sell insurance to their clients, whether it’s to cover their home, pet, car or something else.
In this blog, we provide a quick introduction to the world of insurance brokers, looking at what their roles actually entail and how they deal with claims. Read on to find out more.
What is an insurance broker?
Acting as an intermediary, or ‘middle-man’, between a potential client and an insurance company, professional insurance brokers are paid to find their clients policies that provide the right level of cover they are looking for, at the best possible price. Despite many believing that brokers work for banks or insurance companies themselves, this is actually a common misconception. The truth is, insurance brokers represent their clients and not the insurance companies who provide the policies they sell. Instead, insurance brokers tend to work for third party brokerage firms with no associations to specific insurance providers.
Traditionally speaking, all insurance brokers fall into one of two categories. These are:
Retail insurance brokers:
The most common type of insurance broker, these brokers typically source and arrange insurance policies for private individuals or companies, dealing with them directly throughout the selling process. This could include to facilitate the sale of motor, travel, house or pet insurance to an individual, or policies which cover damage to property and business disruption for corporate clients. As a rule, these brokers are also responsible for facilitating an employer’s liability cover relating to work-based injuries and products liability insurance to protect against faulty consumer products.
Commercial insurance brokers:
Typically dealing with more high-value and complex insurance deals, commercial brokers source and arrange cover for private sector and public sector organisations. This involves dealing with everything from aviation and marine companies to building contractors, government projects and gas and oil companies.
What insurance brokers do
Although we have looked at the different types of insurance brokers and provided a brief overview of the role, we are yet to look into the specific day-to-day duties of an insurance broker. Naturally, this is the key information you’ll want to know if you are looking to start a career in this role.
Varying brokerages and financial advice firms all operate differently, and what an insurance broker actually does each day will depend on their specialism. However, common responsibilities in the role includes the following:
- Building and maintaining client relationships
- Researching specialist market trends, as well as new insurance policies and products
- Negotiating better policy terms and deals with insurance providers
- Discussing clients’ current and future needs in relation to their cover
- Advising clients on when and how to make claims on their policies when needed
- Collaborating with insurance underwriters and agents on reports and contract formation
- Ensuring insurance premiums are collected
- Renewing, upgrading and amending existing insurance policies for clients.
Do insurance brokers help with claims?
To put it simply, yes – insurance brokers can help with insurance claims. As previously discussed, insurance brokers work for third party companies and do not represent your provider. This means, when you make a claim, they can help you decipher the questions your insurance provider is asking you to ensure you give the right answers to help your claim. Remember, brokers sell you on a policy. For this reason they are likely to want to make sure your insurance provider fulfils its obligations to you, as this will also protect their reputation. With this in mind, when a broker presents a claim to your insurer, it’s not uncommon to see a quicker and more efficient settlement than you might otherwise expect.
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