How do Insurance Brokers earn Income?

August 31, 2019 in Insurance Broking

How do Insurance Brokers earn Income?

Unlike insurance agents, insurance brokers sell policies from a variety of insurance providers thus they must be familiar with the types of policies every company offers. Brokers tend to have a better customer relationship because they guide the customers through all the options and negotiate discounts; thus the customers get a better deal than they would with the agent’s assistance.

Brokers are usually paid commissions through insurance company they are working with. There are also other ways in which insurance brokers can earn income. Here, take a look at the various sources of income and details regarding that.

  1. Brokerage
  2. Consultation
  3. Claim Support

1.  Brokerage:

Insurance brokers represent both the insurance companies and the customer. They are authorized to provide a customer a suitable insurance policy from any insurance company. In this case, the broker is paid a brokerage by the insurance company whose policy a customer eventually chose.

2.  Consultation:

There are some situations where the customer needs professional advice regarding insurance policies, financial planning, etc. At that instant, brokers can offer consultation on a fee-basis. For an example, a customer is looking for a life term insurance policy but he is certainly not aware of insurance policies. As an insurance broker, you can help the customer sort out the appropriate policy for him and get a consultation fee in return. Not so complicated, right?

3.  Claim Support:

Without someone’s help, filing a claim might get worse. Hence, brokers are valuable as they know the typical process of filing a claim very well than any. Also, they have worked with several insurance companies. When a broker helps the customer to file a claim and get it settled, broker can charge a specific fee in the name of claim support. For an example, when a business’s property is damaged, broker can assist to get the claim settled, instead of a customer having to figure it out himself. As per IRDAI Regulations, an insurance broker could not charge for a claim if the policy has been serviced through him.

Tips on insurance brokers to boost their income:

  • While sending quotes to a customer, it has to be made sure that summary sheet is added for a better clarity. 
  • Have professional literature and brochures about the broker’s work experience as well as the services you offer. 
  • Stop putting your extra time and effort in making the business organised and get a Sibro. It helps the broker or a company to keep track of the daily tasks, follow ups, deadlines, and maximise the sales efforts.  
  • Make use of social media and start socialising. It will help people connected when they need someone to solve their issues.

If you think that we have missed some tips or strategies, please share it with us!

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