Insurance Broker Vs Insurance Agent


vector image of 2 people talking -Difference between insurance agent and insurance broker

I was traveling to Vizag by train.

During journey the person beside me seemed very knowledgeable.

We immediately became friends.

During our conversation, he asked me, what I do for a living.

I said, “I am an insurance broker”.

His attitude toward me immediately changed.

He hardly spoke to me later.

“What happened ?”, I asked him directly.

Why you need insurance broker - sketch graphic meme

He expressed, how one insurance agent miss-sold him one investment cum insurance plan.

He lost good money which was meant for his daughter’s marriage.

This is a major problem in India.

There’s a perception that insurance intermediaries like agents and brokers do not provide complete information regarding the products to their customers. In such cases, customers feel that they might end up with policies that they either do not need or do not provide them with adequate insurance protection.

In the above case, most people make the mistake of assuming that insurance and investment are the same.

But both are entirely different and need to be kept separate. It is important for any insurance intermediary, be it an agent or a broker, to explain such aspects to the customer. A customer, in turn, needs to ask the right questions to the intermediary to ensure that he understands the terms of the products thoroughly.

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Now I had his attention.

I explained to him how an insurance broker is different from an insurance agent; how, unlike an insurance agent who represents the insurance company, an insurance broker is a representative of the customer and has a duty towards its clients to protect their interests. Since brokers are not tied to a specific insurance company, they can present options from various insurance companies to their customers and help them select the right insurance product that will fulfill their insurance requirements.

Broker success is linked to client satisfaction and agent success is linked to insurance company satisfaction. An insurance broker is obligated to help its clients and is less likely to missell products.

More than money, it is the feeling of helping society, which keeps us going.

Later, he wanted his daughter to work in Insurance broking.

I felt happy.

Do you also believe, insurance broker and insurance agents are the same?

Do you know, Even an Insurance agent now can become an Insurance broker through the POSP model?

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Susheel Agarwal

Susheel is the CEO of Ethika Insurance Broking P Ltd. This company, which has a current value of 10 million dollars, was bootstrapped by him and two of his friends. He attributes his success to his ability to inspire others to seek happiness at work.