What is an Insurance Broker and What does an Insurance Broker do?

What is an insurance broker? – The insurance brokers , usually called brokers have an advisory role in the recruitment and use of insurance, they play the role of intermediaries between you and the insurance companies.

The broker must be an impartial person, what we mean by this is that he should not lean towards any particular insurer but rather recommend the best coverage for his client.

Therefore the broker must be an expert in insurance, and know the policies in detail.

What is the difference between sales representative and insurance broker?

The insurance sales executive is a worker of a particular insurer whose job is to sell insurance, but the broker will not only offer you the insurance, but will also be in charge of advising you in a personalized way throughout the term of your policy, responding to any query you have.

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The broker will represent you before the insurer, in the event of a claim he will support you with the requirements imposed by the insurer.

In addition, the broker has a special authorization from the authority of each country to act as a broker. 

The important thing is that you ask them to verify if it exists in the records of your country. For example, in Peru there is a registry of brokers and each broker has his own code.

What does an Insurance Broker do?

In addition to those that we have indicated, they must always keep the insured informed of the conditions of the policy or contract, about any possible modification, assist or advise them during the term of the contract, and when a claim occurs.

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Also, he must validate the identity of the insured, the location of the insurable assets, the condition of these assets, inform the insurer about the status of the proposed risk, report on the premiums and broker the documents received by the policies.

Is the broker’s advice really neutral?

The insurance broker acts as an intermediary for the insurance companies, generally without being exclusively linked to any of them. 

Therefore, in the plans that it offers you, they should be the ones with the greatest coverage based on your economic situation (that is, what you are willing to pay as a premium) or, on the other hand, the risks that you wish to transfer to the insurer.

In the event that the broker does not indicate details, does not show knowledge of the policy, or does not have greater knowledge of what the rest of the market offers, similar products, advantages and disadvantages, and that it is not giving you the information that you really need to make the right decision, we recommend that you look for a better broker and compare.

It should also be noted that there are exclusive insurance brokers, that is, they have a strategic alliance with a specific insurer, therefore it is important that the broker clearly indicates this to you and is transparent with you, since you will be comparing plans from a single insurer. 

There is nothing wrong with this, as long as it is transparent.

How long does the counseling last?

It starts from the moment you request an insurance plan, until the end of the policy, or until the settlement of a claim.

But generally a good broker-client relationship is generated in which the advice is continuous. .

How to become an insurance broker

Obviously each country establishes different rules to be able to be a runner. In Peru, insurance brokers are not only individuals; They can also be legal persons (companies). 

The requirements to be an insurance broker or broker, in the case of Peru, are established by the SBS. We show you some.

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• Demonstrate knowledge in insurance, one case is having worked in an insurance company at least 3 years in the technical area or taking an insurance broker course authorized by the SBS of approximately 350 hours.

• After passing the course, you must demonstrate that you have no direct or indirect debts overdue for more than 120 days, or that they have entered judicial collection.

• Take the SBS insurance broker exam

• In the case of passing the exam, other incompatibilities to the position will be verified.

• You will be informed if you are eligible to be a broker, and you must subscribe a professional civil liability insurance from insurance and reinsurance intermediaries to cover possible damages caused to clients due to mismanagement or advice.

How much is the salary of an insurance broker?

This is a relative value, since the salary or how much the broker earns, is based on a percentage of the insurance premium, therefore if he is a good broker he will always have clients and a good salary can be generated. 

But for those who are starting it will be more difficult since they do not have clients and it will take a few years to form a portfolio of clients, but nothing is impossible, it will always depend on the professionalism of the insurance broker.

Let’s see an example, if you are starting, and you start to mediate vehicle insurance, let’s suppose an insurance of a vehicle with a value of $ 500, and the commission assigned by the insurer is 7%, you would have $ 35. 

If you managed to mediate one every day for a month you would get $ 1050, but now let’s see by withdrawing the IGV or VAT of 18%, you would have $ 756 in a month, attention you must achieve daily vehicle insurance.

How to choose the right insurance broker

In the first place, when you take out insurance, you are protecting your assets against the risk that an unforeseen accident affects your assets, or also your health or life, in such a way that an insurance company is responsible for covering the expenses generated through compensation.

Therefore, in definition, the insurance broker must know the insurance policy in detail, or must be an insurance expert. 

You must be able to identify that it is, by clearly indicating the insurance coverage, the requirements, the necessary documentation, and most importantly the warranty clauses or the requirements that you must meet for the insurer to compensate you against a Sinister.

As we have indicated, there are brokers who work exclusively for a particular insurer, therefore this broker must be transparent and indicate it. 

There are also branded brokers such as Falabella insurance brokers, which offers insurance associated with the products it sells.

There are also brokers who specialize in one type of insurance, for example in Vehicle Insurance or specialist in SCTR Health and Pension Insurance.

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