What is the role of an Insurance Broker?
An Insurance Broker is a qualified advisor that specialises in Insurance and Risk Management.
Insurance Brokers act on behalf of their clients, assisting with the understanding and placement of various types of insurance products.
Insurance Broker’s do more than “get quotes” and “handle claims”. When deciding where to place the insurance, a broker will tailor the insurance to suit the client’s specific requirements and dissect the policy wordings to make sure there are no hidden exclusions or restrictions. In addition, a broker will handle the day today servicing of the account and will act as a direct line of contact for any claims, questions or changes that are required; so no waiting on hold to speak to a different person every time.
How to choose an Insurance Broker?
Whilst many Insurance Brokers have access to the same offerings, there are various differences between Insurance Brokers which can lead to different results, some examples are:
Insurance knowledge is based on both research and training. As an Insurance Brokers knowledge increases, so will their exposure and involvement with higher risks and more complex situations.
An Insurance Broker will always work closely with mentors as they develop their skills, similar to other consulting type industries. What this means is that an Insurance Broker will often create their style or broking method based on the professionals and mentors that have guided them.
Insurance Broking knowledge and skills are often dedicated by “time in the game”. The more complex situations a broker will come across, be it placing insurance or managing a claim, the more they will learn. If an Insurance Broker has worked in the industry for a longer period, or has been exposed to more complex situations, it is likely that their knowledge and skillset will be more advanced, allowing them to provide a broader depth of advice and more strategic solutions.
There are often two types of Insurance Brokers, these are General Insurance Brokers and Specialty Insurance Brokers. General Insurance Brokers will often look after a diverse range of insurance products and industries where as Specialty Insurance Brokers will often look after one particular product or industry. This doesn’t necessarily mean that one will provide better advice than the other, all this means is that one may experience or have more regular dealings with a particular type of risk than the other.
Should I ask multiple Brokers for a quote?
Whilst this is definitely an option, it is not advisable. There are a few main reasons why this method may work against you:
1. Quotations can vary if different information has been disclosed to the Insurance companies. This underwriting information is not always presented on the quotation or insurer documents.
2. Insurance companies can take a reactive approach if they see the same presentation from multiple Insurance Brokers (in turn LIMITING your options instead of expanding them).
3. Different Insurance Brokers may get back to you at different times, meaning you may wait for a lot longer to make a decision which could add stress to your business.
If you are already with an Insurance Broker and feel as though you may not be receiving the most appropriate advice or service, ask another Insurance Broker.
An Insurance Broker should be reviewing your current insurance policies and service standards and advising whether they will be able to add value to your business. Value can range from more comprehensive insurance products to more reliable and detailed service.
So, how do I choose the right Insurance Broker for my business?
Whilst there is no simple answer, the most appropriate solution is to interview them. Speak to a few Insurance Brokers and get to know them before proceeding with the quotation and advice process.
Some key areas that you may want to understand include:
1. What industries / products do they specialise in?
2. What are their qualifications and experience?
3. What is their broking process and does this remain consistent each year?
4. Are they appropriately qualified and experienced if my risk / business develops or changes?
5. Do the Insurance Brokers manage their own claims?
6. What industry bodies are they members or a part of?
7. Are they highly recommended online?
8. Did they ask strategic questions and want to truly understand the risk?
9. Did they listen you and your needs?
10. Did their values align yours?
If you do happen to find the right Insurance Broker, it is always recommended to try and understand their position within the business and their long term plans. If you find the right Insurance Broker and they are an employee, there is chance that they may leave the business and your insurance portfolio will be transferred to another advisor. Sometimes having these discussions can help businesses prepare for different situations as time passes.