What does an insurance broker do?
Brokers work independently to arrange deals between clients and insurers. They advise clients on the most appropriate policies for them.
Personal insurance brokers generally deal directly with individual clients or companies and arrange policies for home, motor, travel or pet insurance; while commercial insurance brokers deal with more high-value insurance for areas such as the marine, aviation, energy and finance sectors.
Brokers today use their market knowledge to structure complex risk solutions for clients, primarily in the key broker markets of non-life commercial insurance and reinsurance. These solutions may be limited to cover in the UK but in an increasingly globalised economy the role of brokers is taking on an increasingly international dimension, with brokers handling multinational risks and working with providers in more than one country.
Where do insurance brokers work?
Individual and business insurance buyers often need expert advice to enable them to assess the risks they have, to help them minimise those risks in a practical way, and to match their needs to the best seller of insurance in the market.
Many people and businesses choose to buy insurance directly, but others – and in particular commercial buyers – use an intermediary.
Insurance brokers work as intermediaries either as an individual or part of a firm that provides independent advice to meet specific customer needs, choosing from their market knowledge.
Skills you would need to be an insurance broker?
There are many different types of skills that you will need to become an insurance broker; these include:
- Interpersonal communication skills
- Excellent attention to detail
- Numerical skills
- Able to understand and analyse information
- Negotiation skills
- IT skills
Difference between an insurance broker vs underwriter?
Sometimes underwriters and insurance brokers can have quite similar roles however, there are a few key differences between the roles also. Insurance underwriters normally work for insurance companies to make sure they are offering the right amount of insurance to the right clients. They review applications for insurance and work out how much coverage the company can offer. They do this by calculating the client risk using computer software and analysing the results to advice on the potential risks and benefits for the company they work for.
Insurance brokers, on the other hand, work as middlemen between clients and insurance companies; they are responsible for meeting with their clients to work out the best insurance policy to fit their needs. Some insurance brokers work for one insurance companies that have many different services for their clients (similar to an underwriter); whereas some brokers work independently as insurance agents where they work with many different insurance companies to offer a wider range of policies for their own clients.
Why should I become an insurance broker?
There are many pros to becoming an insurance broker especially if you want to get into the insurance sector straight from school! Here are the top reasons why you should consider working as an insurance broker:
- Excellent job prospects
Most people and almost all businesses need and insurance policy and with the need there has been an increase in demand for insurance brokers which is expected to grow in the next decade according to the Bureau of Labor Statistics. So there are excellent job prospects in insurance whether you want to work with an insurance company or independently as an agent.
- Varied/Flexible work
Being an insurance broker means dealing with a range of different clients; so your work is flexible based on your clients’ schedules rather that staying in the office all day. This means that your job as an insurance broker won’t get boring the varied work there is available and no two days being the same.
- Make an impact
A big part of being an insurance broker is helping your clients find the best insurance policy for them and their specific needs. Working in insurance can make an impact on people’s lives which can be rewarding when helping to protect important assets to your clients.
- Financially and intellectually rewarding
Depending on your skills and expertise in the field, there is always room for growth in insurance and can become financially rewarding as you grow in your career. As an insurance broker, you will be dealing with different clients and insurance companies hence giving the opportunity to learn from all types of businesses on a daily basis making the role and intellectually rewarding one also.
The starting salary for trainee insurance brokers can be from £16,000 – £22,000, this can then go up if you’re on a graduate scheme where the salary would be between £22,000 -£28,000 depending on the company you work for. In general, qualified brokers can earn anything from £20,000 to £50,000 for more senior brokers or account managers. Insurance brokers can also earn money through commission and fees based on the amount of insurance policies sold.
How do I become an Insurance Broker?
Numerically-related or business degrees can be an advantage, but aren’t a requirement for entry to the profession. Training programmes vary considerably, with larger broking firms offering more opportunities for structured training programmes. These typically involve job rotations for experience of different areas of work, over a period of 18 months to two years.
There has been a growing emphasis in recent years on graduate-level recruitment and the development of graduate training programmes that include CII professional qualifications. This provides a structured framework leading to Chartered Insurance Broker status. Many employers grant study time and provide help with tuition fees and the cost of learning materials.