What you need to know about insurance broking
Insurance broking is an area of insurance that is not well known to the public, so it is necessary to provide some answers to some of the concerns that have been raised.
Some people think and/or ask the following questions:
- A broker resells insurers’ products and collects the profit margins.
- The broker slows down procedures with insurers.
- Daily life is difficult enough. It is better to do without intermediaries who make the process more cumbersome.
- Why choose a broker if you can have direct contact with the insurer?
In order to better understand the role and importance of brokers, let’s take a few examples from everyday life for illustration purposes.
Some vehicle owners have already had traffic accidents with relatively expensive material damage. Did you plan this accident? Certainly not! So, it often makes you angry. How do you deal with these unforeseen expenses? For many motorists, who very often only take out compulsory third-party liability insurance, this will only be effective months later when the damage suffered is covered and only if they are not liable. Some victims, because of the length of the procedure, abandon their cases and bear the cost of repairs.
In the second case, Mrs. AMBANI opened an electronics shop in a local market and covered her shop with a commercial multi-risk insurance policy including various guarantees. She thus protects her assets and feels more confident and secure in pursuing her activities. During year n+5, a terrible fire destroyed many shops in this market, including that of Mrs. AMBANI. The shopkeepers suffered a lot of damage. Distraught but remembering her insurance, Mrs. AMBANI informed her insurer. The report and the expertise were carried out. She waited for months. Although her case was serious, she had to fight to provide for her family in other ways.
Because of cases like Mrs. AMBANI’s, trust in insurers has been eroded over the years. The average citizen generally insures himself out of compulsion or formality.
How would an insurance broker have intervened in the case of the road accident victim or Mrs. AMBANI?
One of the main roles of the insurance broker is to advise. It is therefore his duty to explain the content of the contract to his clients, particularly the validity of the guarantees he has taken out. Thus, he must be able to suggest optional covers such as All Accident Damage when the vehicle is new or the advance on repairs / on recourse in the opposite case. These guarantees allow the insurer to take direct charge of the claims and then to make a claim against the insurer of the vehicle responsible. In addition, he must be able to make his client aware of the use of protocols such as IDA (Indemnification Directe de l’Assuré – Direct Compensation of the Insured) which allow for an acceleration of the claims settlement procedure. They must also be aware of and keep their clients informed of the competitive advantages offered by insurers (towing of the vehicle in the event of an accident, etc.). A consistent theme in both cases is the slow payment of claims. It is the broker’s duty to follow the procedure for handling and paying his clients’ claims in such a way that the latter does not forfeit the compensation due to them. It must be prompt and fair.
In summary, what should be remembered:
- Insurance brokers are professionals in the field of insurance who can only operate after having obtained a licence from the Ministry in charge of insurance. The insured can therefore trust them.
- It is a regulated profession governed by the Insurance Code.
- The insurance broker is a trader mandated by his client.
- The insurance broker concludes cooperation agreements with insurance companies for the marketing of their products at the rates set by them.
- The insurance premium for direct insurance or through a broker is the same.
- The broker’s remuneration consists of the commissions paid by the insurers.
- Brokers may have insurance delegations to handle claims on behalf of insurers.
- The role of brokers includes, among others
- Advice
- Knowledge of the insurable risks and insurance problems of their clients and the search on the market for offers adapted to their needs and meeting a good quality/price ratio
- Good follow-up of claims files
Ultimately, your insurance cover will be more adequate if you are assisted by an insurance brokerage company. This service is free of charge for the client and does not affect the premium you pay.
We are aware of the efforts you make every day for your family and your businesses. We want to relieve you of the burden of managing your insurable risks and the resulting contracts. We work hard every day to deliver a quality service to our customers. But above all, we seek out the best offers and ensure that the benefits due are effective.
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