How are Insurance Agents and Brokers Different?

Although they are both regulated by the IRDAI, specialize in selling insurance products for a commission, and have similar skill sets, the way the industry views insurance brokers and agents is distinct. Therefore we have compiled the key differences which sets the two profiles apart. Let’s go through the details.

People frequently use the phrases “insurance agents” and “insurance brokers” interchangeably when discussing insurance. However, these phrases are exclusive to the sector, and an agent’s job is distinct from a broker’s. Both insurance brokers and agents can be beneficial in securing the proper protection for your personal and business requirements in terms of the insurance. Insurance brokers, who are different from agents, have an essential duty to their potential clients. A noteworthy similarity between brokers and agents is that both earn commissions depending on the volume of insurance products they sell to clients.

Who is an insurance broker?

An insurance broker is an insurance professional licensed by the Insurance Regulatory and Development Authority (IRDAI) who sells various insurance products from different insurance companies to meet their clients’ needs for pre-defined compensation/commission from the insurers.

Who is an insurance agent?

Insurance agents are persons who are licensed by the authority to solicit insurance business relating to renewal, continuance, or revival of insurance policies. Agents fall into two categories – Individual agents and corporate agents. Individual agents are individuals who represent an insurance company while corporate agents are intermediaries (other than individuals) who represent an insurance company.

Role of agents and brokers in insurance?

Given the complexity of the insurance market, insurance brokers and agents play a crucial role. They are the major pillars of insurance sales management. Despite the fact that selling insurance is their primary responsibility, agents and brokers also have to explain the advantages of insurance and explain what is covered to their clients. Insurance brokers usually deal with numerous insurance firms and keep an eye on the market to help their clients receive the greatest coverage plans, unlike insurance agents who only represent one business and sell the products that the company offers.

What are the differences between insurance brokers and agents?

• Insurance brokers promote and sell products from different insurance companies whereas insurance agents promote and sell various insurance products like health insurance, life insurance, auto insurance, etc., but for a single insurance company.
• Insurance brokers work independently between the company and the client whereas agents act as an intermediary between the company and the client.
• Insurance brokers negotiate insurance compensation on behalf of the client with the insurers, insurance agents gets predefined salary or commission based on their sales performance.
• When insurance brokers use external courses and experiences to train themselves, get passed an exam, and retain a minimum capital as per regulations to get a license, insurance agents register with an insurance company, acquire training from them, take an exam and clear it to get a license.
• Insurance brokers have in-depth knowledge of multiple products in the insurance industry. They’ll have to explain many products to identify what suits best for their clients’ needs. At the same time, insurance agents have comprehensive knowledge of products offered by their respective insurance companies.
• Insurance broker experience varies based on the type of policies sold whereas insurance agents advise their customers about the products they sell and ask for commission from companies.
• Insurance brokers have wide business exposure since they have access to various insurance products in the market whereas insurance agents have limited business extent as they work with the products of only one company
• Insurance brokers require one of the best insurance broking software to effectively manage their prospects, policies and claims whereas insurance agents can stick with their insurance company’s work process to increase their effectiveness and boost sales

Without a doubt, both insurance brokers and agents can enjoy fulfilling professions with boundless earning potential! But if you work as an insurance broker, it goes without saying that you should get your hands on some of the most highly rated insurance broking software so that you can manage your insurance broking business much more effectively.