The future of insurance brokerage will only reward brokers that adapt to and embrace current trends, such as digital transformation. The highly fragmented insurance landscape does not make matters any easier for businesses looking for brokers. The dynamics in customer demographics, technology and economics require customised actuarial models. Since an insurance broker represents a customer and not an insurer, you must exercise due diligence when looking for a service provider. This article highlights essential tips for choosing the right insurance broker.
Area of Specialisation
Some insurance brokers do a little bit of everything. For instance, you will find them selling insurance policies in the property industry, health industry or automotive industry. While they might be knowledgeable in the different fields, their proficiency in one or two areas might be wanting. It is essential to go for a brokerage that specialises in one or two industries. For instance, an apartment block is in a different class compared to other residential and commercial properties. Therefore, if you want to insure an apartment block, you need to find a broker focusing on apartment building communities. It is because different niche industries have nuances that a general insurance broker might not notice. Do not be afraid to drop a broker if you feel that their service is not tailored to your needs. After all, there is no need to pay monthly premiums for a policy that does not suit you.
Insurance brokers can have accounts with one or multiple insurers. A broker who approaches customers and sells insurance products of one insurance company is referred to as a captive broker. They cannot guide their clients to any other insurance company apart from the one they have an agreement with. On the other hand, an independent broker can market and sell insurance products for different companies. It is advisable to work with an independent broker because they have various products and policies to pitch. For instance, if you do not want one company's products, an independent broker will move to another firm's products until they find something that suits you. It saves time since you do not have to look for a different broker every time you are dissatisfied with a particular product.
The only way an insurance broker can provide you with products that meet your needs is if they understand your industry's environment. For example, reinsurers, carriers and new brokers are considered a threat since they target large accounts. They know that large accounts attract lucrative commissions, and brokers only need a few small accounts to do well. It is why you need an insurance broker capable of embracing current trends, which benefit their clients. Such brokers can help adjust your insurance policy depending on the prevailing industry and business environment.
Contact a local insurance broker to learn more.Share