What Is The Difference Between Insurance Broker & Insurance Agent?

Summary: Insurance agents and insurance brokers are two professionals working in the same field but their responsibilities and roles are very different from each other. An insurance agent conducts his activities with care for the interests of the insurer while a broker not only fulfils the client's instructions, but also defends his interests and achieves optimal conditions and benefits for his employer. Read on to know more the differences between them. 

Do you see the differences between an insurance broker and an agent? Did you know that these are two fundamentally different forms of work? Did you know that some are paid for by you and others by the insurer? In India, often between the concepts of "insurance broker" and "insurance agent" put an equal sign.  

Insurance Agent: Who Is It? 

Insurance agents are Indian individuals or legal entities that represent the insurer and act on its behalf. That is, they are entitled to sell the company's policies to potential customers. 

The agent conducts his activities with care for the interests of the insurer. Its purpose is to attract customers for the insurance company. 

An insurance agent can cooperate with several companies and work with several types of insurance at once. Such a specialist is called multi-mandated. 

What an insurance agent does: 

Looking for customers; Advises potential clients on the terms of insurance and tariffs of the insurer; Draws up insurance documents for the client; Pays for the insurance product. 

Insurance broker: who is it? 

Insurance brokers in India, unlike agents, operate on the other side – they serve the interests of consumers of insurance services. 

A professional broker not only fulfils the client's instructions, but also defends his interests and achieves optimal conditions and benefits for his employer. 

Insurance brokers in Mumbai must permanently reside in the territory of the Russian Federation and be registered in accordance with the procedure established by law. 

What an insurance broker does: 

Advises the client and helps to fill out the documents correctly; Warns about the risks and explains all the subtleties; Assesses risks; Collects documents and transmits them to the policyholder and the insurer; Collects insurance premiums to transfer to the insurance company. 

There are not so many differences between them, but they are still there. 

Type of contract: Agents enter into an insurance contract with customers only on behalf of the insurer. And this contract begins to operate from the moment you sign it and transfer the money for the policy to the agent. It is believed that the insurer received them, even if in reality the agent will transfer them to the company's office in a few days. 
Insurance broking companies work according to the same scheme, but more often, they act as an independent organization and offer you to additionally sign another contract - on the provision of insurance broker services. Conditions can be very different. Selection of insurance programs: Brokers usually cooperate with several insurers. Sometimes agents represent only one company, in some cases, they offer products of several insurance organizations—for example, under different types of policies, an agent can represent different companies. 
It happens that the agent of the insurer is a bank, a car dealer centre or another organization. They can have agency agreements with many insurance companies at once. Cost of services: Agents do not charge people for their mediation: they are paid a fee by the insurance company. 
Brokers themselves have the right to decide from whom to take a commission for their services - from the buyer or from the insurer whose policy they sold. But the broker is obliged to warn in advance who exactly will pay this reward. Reliability and safety: Agents are official representatives of insurance companies. Insurance broking companies monitor the work of their agents, make sure that they correctly calculate the prices of policies and draw up documents.