All knowledge about the functioning of insurance companies in the majority of the population is associated with the work of their agents and policyholders. Recently, another profession has appeared on the domestic market of this type of service, which is called an insurance broker.
From the long-familiar images of insurance agents, they differ in the scale of their activities, as well as increased responsibility to their clients.
Features of the work of an insurance company broker
The whole essence of this profession is to perform mediation between the insured and the company providing the package of services. The broker is a small company with its own accounting department, as well as several specialists. It must be registered as an entrepreneur, conduct its activities on the basis of a license issued by the Federal Insurance Service.
The work of such a firm is carried out simultaneously with several dozen insurance companies. Cooperation with the largest number of organizations depends on its status and reputation.
The broker’s profit is a percentage of the sale of policies, but at the same time, he does not have the right to increase the price of each contract, at his own discretion. Under such conditions of cooperation, it is beneficial for the broker to be a competent specialist and represent the interests of the parties with absolute impartiality towards them. In relation to the client, the intermediary acts as a defender of his rights help to receive the required compensation payments in case of damage.
The main tasks facing an insurance broker are as follows:
- The choice of policies of one company or several, taking into account the risks and wishes indicated by the client.
- Responsibility for the drawn-up contract, from the beginning to the end of its validity.
- Protection of the client’s rights in obtaining the required insurance payments.
The quality of an insurance broker’s work depends on his ability to manage the number of losses. The higher his professionalism, the fewer obstacles there are in the way of obtaining compensation from clients. This affects the degree of influence of the brokerage firm on the insurer.
Additional services arising in the process of working with a client, as well as individual consultations, constitute a separate type of expense and the consumer has the right to exclude it from the official contract. But a non-fixed fee can be assigned separately, for each difficult case.
Who needs brokerage services?
This type of service is of interest to residents of megacities, since with complex types of simultaneous insurance for several positions, among which may be:
- a life,
- real estate,
- private business,
- CASCO and car insurance
The client will have to apply to several insurance companies. Employees of the brokerage firm will choose the most suitable option, including all the features of the wishes of each particular client. By contacting a broker, a citizen will be able to save time and money, and as a result, he will receive an agreement concluded with several insurance organizations at once, each of which may be responsible for one type of risk. Such balanced contracts are beneficial to all parties involved. On the one hand, the company sells its services, and on the other hand, the client is relieved of the need to go around various offices, understand the intricacies of each service, and conduct tedious negotiations with agents.
All this work is done by a broker who receives his salary from commissions for each sold insurance service from the companies with which he cooperates.
Benefits of an insurance broker
When a client contacts a brokerage house, he receives the following service benefits:
- Find out the details of the terms of the contract.
- Receives a full calculation of the cost of the proposed policy.
- Introduces the state of affairs of each insurance company, including development prospects and features of claims payments.
- Enjoys the benefits of various promotions and discounts in effect in some companies at the time of the conclusion of the contract.
- After all the information received, the consumer of services is left to make his choice, then purchase the appropriate policy.
A serious brokerage firm has a whole staff of competent employees who are aware of all the intricacies of the work of partner insurance organizations. They know all the nuances of concluding and executing contracts, the peculiarities of the rules of each of the diverse number of companies, and professionally help clients choose the insurer that suits many parameters.
A reliable intermediary, which has a database of a huge number of contracts, has weight for both clients and insurers, which means it is able to defend the interests of consumers in complex issues. The brokerage firm provides any assistance in the payment of insurance, up to legal, if the case is considered in court.
Sometimes insurance brokers, in order to attract clients, may offer significant discounts, which they pay out of their part of the remuneration. But so far, unfortunately, most of the intermediaries are trying to get the maximum profit from their activities without investing in reputation and advertising.
Pitfalls in the work of brokers
The state of affairs in today’s insurance market is such that new companies can spring up quickly but also suddenly disappear, and the brokers who partner with them do so even faster. Therefore, it can be quite difficult to find reputable representatives of this type of service. Often, under the guise of brokers, they are simply active agents who have concluded all kinds of cooperation agreements with various companies in the insurance sector. They do not have a license for this type of business, provided for by law, although often even its presence cannot guarantee the reliability of an intermediary. Among those, there are many scammers trying to sell fake policies or enter into contracts with non-existent firms.
The client needs to be careful when the broker offers too much discount, as this may be a sign that the intermediary is partnering with the company in their common interest. The client can suffer greatly, as large commission payments and discounts are often offered by those companies that are on the verge of bankruptcy, thus trying to delay the end of their activities at least for a while.
Also, the broker’s ignorance of discounts and promotions in the company of interest to the client may indicate his incompetence.
What should a client of a brokerage firm pay attention to?
Before contacting a broker, you need to find out about his professional viability from the reviews of his clients, and also make sure that he has a license. If the work of the broker satisfied the consumer so much that he is ready to sign all the documents, then just in case, before making a final decision, you need to contact the insurer company and check whether such a partner really performs a certain type of activity for it.
The financial stability of partner companies, as well as payments for terminated obligations, are not the responsibility of intermediaries, but a reputable brokerage firm will always objectively fight for the interests of its clients and maintain its status.
