Why use an Insurance Broker ?
Insurance broker represents the insurance buyer, and not the insurance company (insurance seller), though the remuneration of insurance broker is paid and borne by the insurance companies. There is no additional cost to the insurance buyer for placing business through insurance broker.
Insurance brokers have been introduced into the indian market by insurance regulatory and development authority (i.r.d.a.) as professionals, who will truly represent and service the interests of insurance buyers.
Insurance brokers have qualified and experienced insurance experts and can buy insurance for their clients at the most competitive premium rate and terms.
Insurance brokers provide a package of services to the insurance buyer, including post-insurance services as well as assisting in submission of claim documents to insurance company. Please see annexure for functions of insurnce brokers.
Insurance brokers have to obtain licence from the i.r.d.a. before they carry on insurance broking in india and the operations of insurance brokers are monitored and controlled by i.r.d.a. a copy of code of conduct prescribed by i.r.d.a. for insurance brokers is enclosed.
Insurance brokers are different from insurance agents. Insurance agents represent a given insurance company, and not the insurance buyer. Thus, insurance agents sell the insurance policies of a given insurance company, taking care of the interests of the insurance company (insurance seller), and not of the insurance buyers.
Insurance brokers are professionals and represent the insurance buyers only, and not the insurance company. Insurance broker can place the insurance of his client with any insurance company, in the best interest of the insurance buyer. Thus, the insurance broker is a single window solution for all insurance problems of the insurance buyer with all insurance companies.
Importance of the role of insurance broker in the emerging scenario of ‘detariffing’ :
For the last several decades, the insurance premium rates (in other words the prices) for traditional and/or statutory insurance covers in the Fire, Engineering, Motor, Workmen’s Compensation, etc. departments have been controlled by Tariff Advisory Committee of Govt. of India through “FIRE TARIFF”, “ENGINEERING TARIFF”, “MOTOR TARIFF”, “WORKMEN’S COMPENSATION TARIFF”, ETC. These insurances are known as “Tariff Insurance Covers”.
Now that the Government of India have embarked upon insurance reforms and thrown open the insurance sector to private players, sooner rather than later, the above described administered price mechanism through TARIFFS will give way to a NON-TARIFF regime, whereby the premium to be charged for any given insurance cover will be negotiated and fixed between the insurance company and the proposer by considering the risk exposures, past claims experience, risk improvement measures adopted, etc. on a more scientific basis.
THUS, WITHOUT ANY EXAGGERATION, WE MAY BRING TO YOUR KIND ATTENTION AND NOTICE THAT ALL BUYERS OF INSURANCE LIKE THE PRIVATE LIMITED / PUBLIC LIMITED CORPORATES, STATUTORY CORPORATIONS OF THE CENTRAL/STATE GOVTS., PARTNERSHIP FIRMS, CHARITABLE INSTITUTIONS, INDIVIDUALS, ETC. WOULD NEED TO USE PROFESSIONAL INSURANCE BROKERS, BECAUSE BUYING INSURANCE THROUGH INSURANCE BROKER IS A WIN-WIN SITUATION FOR ALL INSURANCE BUYERS.
SO, OUR DEAR INSURANCE BUYERS, KINDLY BE AWARE OF THE FIERCE COMPETITION IN-BETWEEN THE INSURANCE COMPANIES FOR SELLING THEIR INSURANCE POLICIES TO YOU. BUT, OUR DEAR INSURANCE BUYERS, DO NOT BE TAKEN UNAWARES, BECAUSE INSURANCE IS A HIGHLY SPECIALISED SUBJECT REQUIRING PROFESSIONALS TO ASSIST YOU. APPOINT YOUR INSURANCE BROKERS BY GIVING THEM MANDATE TO NEGOTIATE ON YOUR BEHALF, WITHOUT ANY ADDITIONAL COST TO YOU. YOU WILL DERIVE IMMENSE BENEFTIS IN TERMS OF COVERAGE, PREMIUM, ETC.