Difference between an insurance broker and an insurance agent
If you are shopping for insurance, it is likely that you have come across terms such as insurance broker and insurance agent. Have you ever wondered if both terms mean the same? Or it not, what is the difference?
Both are professionals from the insurance sector, the two titles mean different things. While both insurance brokers and insurance agents act as intermediaries between insurers and buyers, there are several differences.
One of the main differences between working with the J Hatty & Co Insurance Brokers and an insurance agent is who they represent. A broker typically represents the insurance buyer, an insurance agent represents one or more insurance companies.
The differences between brokers and agents
What are the main differences between insurance brokers and agents? This information will be useful to guide you the next time you are searching for insurance in Hong Kong, whether it is personal, health or vehicle. So, here are some of the key ones:
Relationship to the insurer
Generally, an insurance agent has agreements with one or more insurers to sell products. Often, an insurance agent has an exclusive contract with a single insurance company, so the agent can only sell that company’s insurance products.
On the other hand, insurance brokers work with a number of insurance providers. The more variety of product portfolio, the better it is for them. They don’t have any exclusivity contracts. So one of the benefits of working with an insurance broker is that you get the comparison between various providers and plans instantly. This is when a broker may use software from somewhere like iLife Technologies to compare the best deals for their customers, helping to boost customer satisfaction.
Problem of choice
Insurance agents often provide a limited number of ideal plans from the select group of insurers they work with.
When you approach an independent insurance broker, you may feel a tad overwhelmed due to the number of options, plans and variety. Ideally, an insurance broker should be able to help you navigate this easily by only offering those plans that suit your requirement the best.
Resources and service
Insurance agents may or may not work in an office setting and are likely to operate as independent agents. They have limited options in terms of resources and people assisting them with their client needs.
Whereas, insurance brokers typically work with a full team with various resources and different departments supporting their work. This means better services for customers and more resources to access such as online insurance portals and various other data.
Benefits of working with insurance brokers
As you can see that insurance brokers consider the customer as their primary client. Here are some key benefits of working with an insurance broker as opposed to an agent:
- Brokers provide full disclosure on commission rates
- More transparency
- Provide more unbiased recommendations on your insurance needs
- Offer more bespoke insurance service owing to the large number of resources and options
Many insurance buyers often work with brokerage firms when looking for insurance. This is because brokerage firms have a proven track record with staff and insurance brokers who can offer you a range of services. Having said that it is important to know that not all insurance brokers and insurance brokerage firms are alike. Just as you choose your insurance plans wisely, choose the insurance broker you can trust.
