Why Insurance broker
Do you need an Insurance Broker?
Insurance companies today are tapping customers via multiple distribution channel, which includes brokers, direct sales, agents, bancassurance, alternate channels and the internet.
Who is an Insurance broker?
An insurance broker acts as an intermediary between the customer and the insurance company. In addition to ascertaining client’s insurance needs, brokers also offer a range of consultancy services. Brokers co-ordinate with the insurers and reinsurers to get the best rate and the most ideal risk protection cover for their clients.
Unlike all other insurance intermediary who represents insurance companies, brokers represent the customer, and therefore their primary responsibility is towards the customers.
Role of an insurance broker
Let us understand the role of an insurance broker. Mainly, the most important and crucial role that a broker plays is to act as a consultant for the client and help in managing the insurance portfolio
- Assess / analyse client’s risk profile
- Structuring of insurance program
- Market and negotiate program with insurers
- Policy administration
- Claims management
- Risk management services
- Provide regular updates on insurance
Types of brokers
Only licensed brokers are allowed to operate in the Indian market. The application of license to the Insurance Regulatory Development Authority need to clearly specify the category for which a license is sought:-
- Direct Broker
- Reinsurance Broker
- Composite Broker
Factors to be kept in mind while selecting a broker:-
- No of years’ experience in Insurance domain.
- Profile of Clientele
- Technical competency
- Claims handling expertise
- Negotiation skills
- Presence in India and abroad
- Ethics
- Service delivery
The current scenario
With increased competition, insurance brokers have a greater motivation to introduce new and innovative products, to be more responsive to consumer needs, and to deliver higher end quality services. Indian corporates and consumers will benefit directly in terms of service as well as product and policy innovations, and will consequently be able to secure appropriate insurance cover at a more effective cost. Most global insurance companies prefer to deal with brokers because of their technically expertises, customer centric approach and vast reach thereby reducing cost of acquisition for them.
Brokers also assist in creating insurance awareness, increasing market penetration and act as a catalyst to increase competition and improve customer service.
An insurance broker handles the client’s entire insurance portfolio so that the client can focus on core business.
"Insurance is the subject matter of solicitation"