Insurance brokers act as intermediaries between clients, who can be either individuals or commercial businesses and organisations, and insurance companies.
They use their in-depth knowledge of risks and the insurance market to find and arrange suitable insurance policies and arrange cover. They act in the interest of their clients and offer products from more than one insurer to ensure that their clients get the best deal.
Types of insurance broker
Retail insurance brokers usually arrange insurance policies for individuals or companies and deal directly with them. Policies for individuals include motor, house, travel or pet cover, whereas policies for companies are likely to cover damage to property and business disruption. Retail insurance brokers also deal with employer's liability and public and products liability insurance.
Commercial insurance brokers deal with high value and more complex insurance cover in areas such as marine, aviation, oil and gas, and financial risks.
Responsibilities
Activities depend on the type of employer and scale of the business. In a large company, a broker may specialise in a core area; in a small firm, a broker could be involved in most functions, including new business development and acting as placing broker and claims broker.
Tasks often involve:
- gathering information from clients, assessing their insurance needs and risk profile;
- building and maintaining ongoing relationships with clients including scheduling and attending meetings and understanding the nature of clients' businesses or lives;
- foreseeing clients' insurance needs, such as policy renewals;
- researching insurance companies' policies and negotiating with underwriters to find the most suitable insurance for clients at the best price;
- arranging specialised types of insurance cover in complex cases; this may involve preparing reports for insurance underwriters and surveyors and negotiating with insurers;
- advising clients on risk management and helping to devise new ways to mitigate risks, for example, by adding security measures such as fencing, surveillance cameras or lighting to commercial properties to reduce the likelihood of a break-in;
- ensuring clients understand the terms and the extent of the cover provided in line with industry regulations;
- renewing or amending existing policies;
- advising clients whether and when they need to make a claim on their policies;
- marketing and acquiring new clients;
- developing relationships with underwriters, surveyors, photographers, structural engineers and other professionals;
- administrative tasks such as paperwork, correspondence and keeping detailed records;
- winning accounts against competitors;
- keeping up with changes in the insurance market and in the clients' industries;
- collecting insurance premiums and processing accounts.
With all the time it can take to make a sale, an insurance broker's base pay isn't as much as you might think, especially when compared to other professions. However, "base" is the operative word. As is the case with many sales professionals, insurance brokers earn commissions in addition to their salaries, and some of these commissions can be quite substantial. For this reason alone, insurance brokers can more than double their annual base salary, making them some of the highest-paid professionals in the United States.
Industry
As with most “sales” positions, industry affects base wages, and an insurance broker is no exception. Those selling insurance for outpatient care averaged $84,500 a year — the most lucrative industry for all brokers. Agents working in securities and commodities earned a little less than this, averaging $83,670 a year, the Bureau of Labor Statistics adds. Working with employee benefits offers salaries of $74,350 a year, while real estat
Salary
In 2015, insurance brokers averaged $62,970 a year, according to the Bureau of Labor Statistics. Because high salaries — as seen in securities, commodities and employee benefits — can skew this number, median wage is often a better indicator of base salary. Half of all insurance brokers earned $47,450 a year or less — a $15,000 difference from the national average.