In the insurance world, the terms “insurance broker” and “insurance agent” are used interchangeably. But are they the same?
The common ground
Both insurance agents and insurance brokers act as mediators. They are the bridge between insurance buyers and insurance providers. Anyone interested in working in the insurance field should know how to get an insurance license (get listed in finantsinspektsioon) before being qualified to sell policies. So, what makes an insurance broker different from an agent?
The key feature that differentiates an insurance broker from an insurance agent is
who they represent.
What is an Insurance Broker?
Insurance broker is a licensed professional that serves their client’s best interests. Brokers research coverage, terms, conditions, as well as price from multiple insurance companies. They try to find the best fit for their clients. Brokers are legally bound to recommend insurance products that align best with their clients’ financial interests. Their play a role similar to that of insurance advisors, providing financial advice to clients.
An insurance broker’s first duty is to look after their clients. Brokers should be able to facilitate insurance solutions to whatever problems clients face. They compare offers from multiple insurance companies to give their clients the perfect deal. They need to be well versed with everything insurance companies offer. In order to ease up the process, brokers need to have the experience to handle specific insurance needs.
What is an Insurance Agent?
Insurance agents sell insurance policies on behalf of a insurance company. They are mediators between insurance carriers and buyers. Agents provide buyers with information about the policies that the insurance company or that they represent. Once that’s done, they sell the insurance products to the buyers and earn through commissions.
Despite helping buyers to select the right products, their primary duty is towards the insurance providers. Apart from selling policies and products, agents also need to enhance the brand image of the carriers. Insurance agent works for only one insurer.