What is an insurance broker and what do they do?

What does an insurance broker do?

Insurance brokers play a crucial role in helping individuals, businesses, and organisations secure appropriate insurance coverage.

Their in-depth knowledge of the insurance market allows them to tailor policies to meet specific client requirements. 

Individuals may seek coverage for their homes, vehicles, travel, or pets.

Businesses are more likely to seek cover for damage to properties and business interruption, company vehicles, employer’s liability, business travel, and professional indemnity.

The role of an insurance broker and day-to-day responsibilities include:

• Gathering a client’s relevant information, assessing their coverage requirements, and risk profile.
• Researching insurance companies and their products.
• Arranging cover for clients and submitting details to insurers.
• Ensuring clients understand the terms and coverage of the policy.
• Managing the annual cycle, including policy renewals, amendments, and adjustments.
• Advising clients on claims.
• Giving input on risk management, e.g. suggesting extra security measures to a property.
• Building relationships with clients.
• Building relationships with underwriters and various other professionals in the industry.
• Keeping informed of all changes in the insurance industry.

Although insurance brokers don’t need a specific degree, business, finance, management, or economics degrees are beneficial for this position. 

The gold standard in the industry is qualifying through the Chartered Insurance Institute, the world’s largest insurance-related organisation.

It requires ongoing professional development and adherence to its Code of Ethics. A firm designated as a chartered insurance brokerage will have the highest standards and proven reliability.

Insurance broker vs insurance agent: what’s the difference?

An insurance agent is a professional employed by an insurance company to sell insurance. This agent can assist clients in selecting suitable cover from a single provider.

The agent will also establish your cover and prepare the necessary paperwork for you to sign.

Working with an insurance agent is usually free, as the insurance provider pays their salary and/or commission.

An insurance broker differs vastly from an insurance agent as they represent their client, not a provider.

They do not sell coverage but help clients compare plans from different providers once they’ve assessed their needs and gathered all relevant client details.

The broker will secure insurance coverage through an insurance agent. 

Brokers also typically earn a commission when clients purchase coverage through specific providers. Sometimes, brokers also charge a fee for their services.

What are the benefits of an insurance broker?

Finding insurance coverage for your personal or business needs can be time-consuming, tedious, and confusing.

Hiring an insurance broker can ease this burden, as they will do all the necessary legwork on your behalf.

The benefits of an insurance broker include:

• They assess your needs and risk profile and can make suitable recommendations.
• They will tailor your policy to your needs and budget, potentially saving you a lot of money.
• The broker will take care of all administration and help save you time.
• Brokers will also manage any claims.

While brokers can be invaluable in helping clients get the appropriate coverage, there may also be some drawbacks. 

• Not all brokers have access to all insurance providers, which may limit your choices.
• Some brokers charge a fee. If your insurance needs are straightforward, this might not make financial sense.
• A broker’s value is linked to experience, knowledge, and contacts. If you choose an inexperienced broker, it could cause financial problems, especially in the event of a sizeable claim.

How do you find the right insurance broker for your needs?

There are certain things you should consider when choosing an insurance broker:

• Is the broker regulated by the Financial Conduct Authority, the body responsible for ensuring their transparency and ethical conduct?
• Consider which sector the broker specialises in and whether it aligns with your requirements.
• What is their policy and service like when you need to claim? A good insurance broker will support you from the beginning to the end if you need to claim.
• Check their reviews to gain insight into their service.
• Weigh up the overall fit with the broker, not only the price of the insurance. A good relationship and assurance of their support is crucial.

Can I use a comparison site to find a good insurance policy?

Price comparison sites are not the same as insurance brokers.

Comparison sites, or aggregators, only compile quotes from certain sections of the market and allow clients to decide.

They do not give advice or try to match these quotes to clients’ specific businesses or requirements. 

Although comparison sites are free and useful, using a broker is a better option for those with more complex requirements.

Insurance brokers have all the skills and knowledge to help them navigate the vast amount of insurance policies while giving advice and managing all the work. 

Seek expert financial advice

Insurance brokers are experts in their field and can assist clients in finding the ideal policy for their needs.

Clients are spared the tedium of researching and comparing quotes, and insurance brokers also shoulder the administrative burden, often saving clients valuable time and money. 

Expert financial advice is always beneficial, especially when protecting your most valuable assets, including yourself. 

Let Unbiased match you with a professional insurance broker who can offer expert advice, find the right policy for you and provide you with peace of mind.