Difference Between an Insurance Agent and an Insurance Broker
A Day in an Insurance Agent's Life
On a typical day an insurance agent might perform some of the following duties:
- prepare daily, monthly and annual reports
- Maintenance of track records
- Seeking new clients
- Relationship building with the existing and new clients
- In the event of filing of an insurance claim, assist the policyholders regarding filing of claims
- Certain insurance agents may also offer their clients comprehensive financial planning services viz. retirement planning or assistance in setting up pension plans for businesses etc.
The differences between insurance agents and insurance brokers are enlisted below:
Insurance Agents - Insurance agents are insurance professionals that serve as an intermediary between the insurance company and the insured. As a broad statement of law, an insurance agent’s liability to their customers is purely administrative in nature. That is, agents are only responsible for the timely and accurate processing of forms, premiums and paperwork. Agents have no duty to conduct a thorough examination of an individual’s business or to make sure that appropriate health insurance coverage has been provided to the concerned individual. Rather, it is the customer’s obligation to make sure that he/she has purchased the required/desired insurance coverage.
Insurance Brokers - Insurance brokers can be best described as a kind of super-independent agent. Brokers can offer a whole host of insurance products and services for an individual or a prospective policyholder to consider. Brokers are required to have a broker’s license issued by IRDA (Insurance Regulatory and Development Authority) which typically means that the broker will have additional technical and professional expertise as compared to an insurance agent.
Insurance brokers also have a higher duty towards their clients. These brokers have the duty to analyze a business, interpret the data from various databases and secure correct and adequate coverage for the insurance business. This is a higher duty than the pure administrative duty of the insurance agent. However, this expertise comes at a price. Insurance brokers typically charge an administrative fee or premium payments which are higher than that charged by an
