| Around the
world insurance brokers have emerged as the sole distributor
of policies for insurance
companies. So what is this global trend? Insurance
brokerage firms make it easier for insurance companies
to interact with their clients, and vice versa. They
also help predict new trends in the insurance industry.
Insurance brokerage firms manage
knowledge and information flow relating to their clients
and the markets in which they operate. They maintain
detailed records of their clients, and also collate
data from other sources and then analyze them to see
the big picture. They identify new industry trends and
developments on the basis of collated data and evaluate
various insurance products on the market.
Insurance brokerage firms play a
key role in the business development of both life insurance
and general insurance companies. They act as an intermediary
between insurer and client, helping to assess the client's
business and risk profile, and accordingly suggesting
appropriate coverage. They also act to convince
the insurer to assume the risk involved in underwriting
particular policies. Although insurance brokerage firms
draw their salaries from insurers, a firm’s top
priority is to see to the client's interests.
Firms
do not charge any commission for services provided
to clients. When a client makes damage claims, the firm
interacts on behalf of the client with surveyors, photographers
and structural engineers appointed by the insurer.
Insurance brokers also relay data
relating to potential clients’ business and risk
profiles to the technical division of the insurance
company. The broker’s role may vary according
to the size of the insurance company it serves. For
big insurance companies, brokerage firms may operate
in specialized areas, while elsewhere they may be required
to look after the entire range of policies that an insurance
company may have to offer.
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