Is There Still A Need For Insurance Brokers ?
Until fairly recently, it was virtually impossible to obtain insurance for anything without using the services of an insurance broker. This was true for normal domestic insurance, such as home and car insurance, and also for all types of business and liability insurances.
Insurance companies generally did not like dealing with members of the public, as it was too time-consuming and costly. They preferred to use an intermediary, an agent -- usually an insurance broker -- who could deal directly with the public, and then negotiate the risk with the underwriters of the insurance company.
The public had confidence in an insurance broker being an independent agent. In law, the insurance broker was the agent of the policyholder, although they actually received payment by way of commission from the insurance company.
The role of the insurance broker was to understand the needs of the client, and then shop around various insurance companies to find one that best met those needs at the most competitive price, where possible.
Growth of the Internet
Even the growth of the internet in the early 2000's did not immediately change the nature of the insurance market.
Very few companies liked to deal directly with the public, although a few did start to do so, citing the savings that could be made for both parties by not having an intermediary such as an insurance broker.
As the internet developed, especially the mobile internet, insurance companies began to realise that they could actually automate most of the processes around underwriting and claims work, meaning that they could now begin to deal directly with the public without the need for an insurance broker.
In today's insurance market, many of the leading companies pretty much insist that everything is done online, from getting an initial quotation through to claims handling. This tends to apply mainly to domestic and general insurance at the moment, but the trend is very definitely toward automating all types of insurance wherever possible.
Cost Comparison Sites
The other thing that has dramatically changed the nature of the insurance markets is online cost comparison sites. These are fully automated and allow people to compare quotes from a range of different companies, for a variety of different insurance products and utility services.
These sites often offer discounts or savings where one or more product is combined, in theory offering an even better deal for the consumer.
Role of the Insurance Broker
Although the insurance market has changed dramatically in the last few years, there is still a significant role for an insurance broker, both for domestic insurance and for all types of business and commercial insurance, large and small.
The speciality of an insurance broker has changed. Whilst many people may buy their domestic insurance online, there is also a significant number of people who need specialist services that only an insurance broker can provide.
An example might be someone who has a poor driving history, and who would automatically be singled out by an algorithm or two as a bad risk, and either refused insurance or charged an exorbitant price.
An insurance broker should be able to flush out the details of such a risk, and find an insurance company willing to provide coverage at a more reasonable cost.
Insurance Brokers and Commercial Risks
Many insurance brokers have had to redefine themselves in the context of providing insurance to businesses of all sizes, shapes and descriptions. This has meant developing exacting standards in training and practice
Most businesses have fairly complex insurance needs, and often have either too much or too little insurance.
An insurance broker can be an invaluable asset for any business, both in terms of saving them money when obtaining insurance, and helping them process any claims that may arise.
The role of an insurance broker is often overlooked in the context of working through an insurance claim.
Whatever the type of insurance, be it domestic or commercial, an insurance broker can provide detailed legal and financial advice regarding the legitimacy of the claim, and also offer advice on how to fight an insurance company to obtain a just settlement, if needed.