Your insurance broker’s aim and purpose is to help you with all your insurance needs. It’s best that you fully understand the nature of their work to enable you to know what and what not to expect when it comes to their services. This article will discuss:
- what an insurance broker is
- the different types of insurance brokers
- the work activities of insurance brokers
- and the required degrees and certificates for all insurance brokers
What is an insurance broker?
An insurance broker is a licensed professional that deals with offering, negotiating, and selling insurance policies. He or she acts as a middle person or intermediary between you, the client, and the insurer.
For such work, he or she receives compensation. Compensation could come from clients or insurance companies. Insurance brokers also earn by commission.
What are the roles of an insurance broker?
An insurance broker plays the following role for their clients:
- Insurance brokers help their clients to clearly assess the types of liabilities and risks that they are dealing with. Such risks include natural hazards like hurricanes, fires, tornadoes, and floods.
- Insurance brokers also help insurers in clearly evaluating the kind of coverage that is necessary for each and every client.
- Insurance brokers do comparison shopping for and with their clients. They look for numerous policies from different insurers to provide the best possible coverage for their clients
- Insurance brokers also provide risk management strategies to their clients.
Most common risks that insurance brokers tend to for their clients are as follows:
- car accidents
- natural disasters
- cash flow problems
- credit risks
- legal liabilities
What are the different types of insurance brokers?
According to the National Insurance Brokers Association, there are currently 4,000 insurance brokers in Australia. Such brokers process over $19 billion insurance premiums on a yearly basis. Brokers can be categorized into two types when we talk of specialization: retail insurance brokers and commercial insurance brokers.
Retail insurance brokers work for both individual clients and companies. They offer insurance policies on home, travel, health, and car insurance. They also provide support for businesses that need coverage on public, private, and employers’ liability.
Commercial insurance brokers offer high-value and complex policies for clients in the aviation, marine, oil, and gas industry. They provide policies that provide security on machinery, equipment, and real estate should there be any form of damage or theft.
Most agents specialize in one area alone. If you want to look for the best possible life policy for you, it’s best if you’d work with an insurance agent that specializes in such. If you’re looking for licensed, professional, and accommodating insurance brokers in Perth, WA, you should check out the Matrix Insurance Group.
What are the work activities of insurance brokers?
The following are the work activities of insurance brokers:
Insurance brokers work with clients through continuous consultation sessions. They interview clients and gather important information to fully understand particular needs and risks. All important client information is kept safe and considered confidential.
Upon knowing everything about their client’s needs, insurance brokers then negotiate with different insurance companies. They contact different insurance companies to look for the best possible premiums and terms for their clients.
- Risk mitigation
Insurance brokers also handle risk mitigation. They provide clients with an outline of all possible risks and offer a sound risk management strategy. Your insurance broker may require you to do the following to effectively manage your risks of burglary:
- you may be asked to install lock technologies
- you may be asked to set up a home security system
- you may be asked to install surveillance cameras
- you may be asked to have fences
Clients also provide professional advice when it comes to ways to legitimately decrease premiums. They could advise you to use one insurer alone or raise deductibles.
Clients connect with different professionals from different industries to better represent you. They have connections with photographers, engineers, financial institutions, surveyors, and insurance companies to ensure that they provide the best possible service for you.
Your insurance broker will act on your behalf in processing everything. They will do administrative tasks and hold regular correspondence with your insurer and other professionals. They will handle the application of your account, its processing, and its renewal.
Depending on your preferred setup, you will have to pay premiums directly to your insurance broker. It is their task to collect premiums on a regular basis.
Insurance brokers always research and stay updated when it comes to insurance trends and changes. You can always depend on them to know the newest regulations and policies.
What are the required degrees and certificates for one to be a legitimate insurance broker?
Requirements vary per country. Some countries require insurance brokers to have a university degree while others do not. In Australia, no bachelor’s degree is necessary to become an insurance broker. One simply needs to complete an Insurance Broking – Certificate III course at an accredited training institution. For one to be able to apply in such a course, an Australian needs to at least have finished his or her Year 12 study. Once one is equipped with a Certificate III, one will then have to gain a diploma in Insurance Banking. Once one has a diploma, one may then apply for an Australian Financial Services License. Such a license will then allow one to start working as a licensed insurance broker.
Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.