In the world of insurance, the two most common terminologies are the insurance agent and the insurance Broker. While they sound similar, they adhere to several differences and serve distinct roles and responsibilities. That said, here is everything you need to know about these professionals, what differentiates them, the roles they serve, and the legalities they attract.
Insurance Agent vs. Insurance Broker: Are They Different?
Insurance Agent
As the name suggests, these professionals are more invested in selling diverse policies on behalf of one or more insurance companies. Since they are company-centric, their main goal is to elevate sales through direct selling and client interaction. They can suggest policies to insurance-seekers, finalize the deal, and earn commission on each policy sold.
Insurance Broker
The insurance broker works on a different trajectory altogether. They do not represent the insurer; instead, they curate different policies from diverse companies and refer them to a vast demographic based on their preferences and financial standing.
Policy Bazaar is the prime example of how an insurance broker works in general. They are client-centric and thus focus on policy recommendations. Besides, they can help fetch premiums, settle claims, and wrap up policies upon termination- all that for a commission.
While both serve distinct roles, IRDAI remains their governing body. Neither the agent nor the broker can sell policies without IRDAI’s approval and proper licensing, which brings us down to the legal requirements.
Insurance Agent vs. Insurance Broker: Which One Offers Better Growth Potential?
While the presence of both is pivotal for insurance companies, an insurance agent has a relatively narrow reach when it comes to accessing insurance seekers. The reason is simple — they work with a limited number of insurers and often lack the resources or digital presence needed for wider market access.
On the other hand, insurance brokers are more client-centric and have the resources and technology to reach a broader audience, resulting in higher sales and better customer engagement.
There is no doubt that the insurance agent and insurance broker contribute significantly to the insurance sector’s growth. While both are promising, the insurance broker seems to have an upper hand when it comes to growth. However, that does not make the insurance agents futile. The direct access to customers and ease of negotiation ensure they never get out of demand. Let us know if you are interested in leaping into these promising regimes. Adviso’s experts ensure you navigate legalities like a professional.