07th January 2010

Insurance Brokers – Individual Representatives

The biggest difference between insurance brokers and agents is that agents work within a parent company.

The biggest difference between insurance brokers and agents is that agents work within a parent company. They are independent agents who represent a buyer, rather than the insurance company and they often try to find the buyer the best policy by comparing quotes from many different underwriters.

The line has blurred more recently but those are the set definitions. Agents seem to be more likely now to break off onto their own as well. However if you are a business and need to acquire coverage it would make sense to find a provider utilising your own research rather than take the word of someone else. There are so many places online to go and get thorough accurate information that the middlemen are losing their jobs.

Travel agents are a perfect example of this. It used to be that in order to book great travel you had to have one, now you can simply compare flight prices easily on the internet with the click of a button. Insurance brokers are feeling this effect as they have branched out and are providing businesses with never seen before customer service.

It is amazing now the amount of coverage you can get and what kind of service is provided. The competition between the representatives of the companies and the individuals has risen to an all-time high. 

When looking for coverage for your business one must understand the concepts of the different providers and companies out there. Under the Insurance Brokers Registration Act of 1977 it has become regulation for firms to provide appropriate coverage without acting on the behalf of the insurance companies. This was thought to be very important because it allowed businesses to interact with firms without fear that their best interests were accounted for. However legally speaking the 1977 Act has been repealed. 

Since January of 2005 coverage can be acquired as long as it regulated by the Financial Services Authority. This basically means that anyone who is selling insurance may call themselves an agent. A business can find firms internationally, traditionally, over the telephone, or even over the internet.

Scams and fraud have been prevalent for years regarding coverage. This is one of the main reasons that the difference is now negligible and agencies or firms are covered by the new regulations. Insurance brokers cannot reasonably cover individuals or businesses without being regulated and government has ruled this to be fair practice despite this ruling being in clear favour of the company offering the coverage policies.

When acquiring coverage for your business it is important to know what to expect from your insurance brokers, some of these things include: 

● Automobile, property, employee, liability, water travel, air travel and any other necessary type of coverage should be provided
● Advising of the type of coverage needed along with premium prices and preferred payment method
● Information on different types of policies should be provided in thorough detail so that the company knows what policy fits them best
● Provide the clients with preferential treatment so they may be able to properly manage and reduce their risks
● Quick, efficient response time to claims and emergencies

Understanding your firm and what your business needs can allow you to acquire the correct coverage. Do not let someone tell you what is best for your business, act today and do your research.