Question 1

What does an insurance broker do?

Accepted Answer

An insurance broker is a specialist who helps clients manage financial risk. Brokers need a thorough knowledge of the insurance industry to advise clients purchasing policies. A broker works on the client’s behalf and provides advice in their interests. They analyse personal or business risks and help the client decide how to manage them. Brokers also identify risks that should be covered by insurance and seek the most suitable premium for the policy required. Because advice on coverage is central to this relationship, clients must be able to trust their broker with sensitive financial information.

Question 2

What is the difference between an insurance agent and an insurance broker?

Accepted Answer

An insurance agent typically represents one insurance company and sells its policies. An insurance broker works with several companies, allowing them to compare offers and recommend the most suitable premium among them. Agents typically receive a fixed salary, sometimes with a commission-based bonus, while brokers are paid almost entirely through commission. Brokers should work with a wide network of insurers to help clients obtain the most suitable premium for the policies they need.

Question 3

Why use an insurance broker?

Accepted Answer

The right insurance cover matters in both business and personal life. Unsuitable or inadequate protection can have serious consequences, so good advice helps prevent costly mistakes. An insurance broker is an independent specialist with knowledge of the insurance market and access to reputable insurers. Brokers provide professional, objective advice on identifying risks and assessing exposure, and recommend cost-effective solutions.

Question 4

What services does an insurance broker offer?

Accepted Answer

An insurance broker offers services such as arranging new cover, obtaining quotes, renewing policies and assisting with claims. These services span personal, commercial, marine and aviation insurance. The broker builds an ongoing relationship with you to understand your needs and provide a better service.

Question 5

Is it cheaper to go directly to an insurer?

Accepted Answer

Insurers include a standard distribution cost when calculating premiums. This means that the price will generally be the same whether you use a broker or go directly to an insurer. However, the lowest price does not always offer the best value. Using a broker may not cost you more and, wherever possible, they will help you prevent uninsured losses.

Question 6

How are insurance brokers paid?

Accepted Answer

Brokers receive commission from insurers on the business they place with them. The commission is normally a percentage of the premium paid.

Question 7

What is risk management?

Accepted Answer

Risk management involves identifying, assessing and prioritising risks, then using resources in a coordinated and economical way to minimise, monitor and control the likelihood or impact of adverse events.

Question 8

I’m considering health insurance. Are pre-existing conditions covered?

Accepted Answer

A pre-existing condition may affect your health insurance coverage. Most companies do not cover these conditions, while others may accept you in exceptional cases, subject to an exclusion period for pre-existing conditions.

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