Information which is confusing and not transparent and advertising which may even be misleading is fairly common practice in some parts of the insurance sector. For this reason, the services of insurance brokers can be very valuable, as they provide objective advice about taking out insurance, always looking after the customer’s interests.
There are different types of insurance broker: they include retail insurance brokers and commercial insurance brokers.
What is an insurance broker and what are their functions?
An insurance broker acts as an intermediary between the customer and the insurance company, giving advice and recommending the company, type of policy and clauses that are most appropriate for the customer.
The broker is a qualified professional with extensive experience and specialised knowledge of the insurance sector. Brokers normally work for several companies and are not linked to just one, which gives them the freedom to offer independent advice. Insurance brokers are thus fully qualified professionals who protect the interests and rights of their customers when they take out insurance, choose a company, negotiate special clauses, report incidents or claim compensation.
Functions of insurance brokers
The main functions of insurance brokers are as follows:
To advise their customers on everything related to the policy (or policies) that they need to take out: insurance companies, prices, what guarantees the policy does and does not cover, compensation payable, the advantages and disadvantages of each type of policy, whether or not to include certain additional or customised clauses, etc.
To act on behalf of the customer at all stages of the procedure: contracting the policy, the choice of clauses, customising the policy, negotiating policy prices and compensation, reporting incidents and processing claims, etc.
To protect the interests of customers, taking care of their assets at all times.
To analyse the customer’s real needs and, depending on what they are, to offer the most suitable product from the range of options that they handle.
To compare market prices regularly (as they are constantly being changed and updated) and to offer the customer the policy with the most competitive price, provided that it includes the cover needed.
To warn the customer about unclear conditions and misleading advertising, expressly pointing out exclusions that appear in the small print of the policy’s terms and conditions.
To support the customer at all times, including the renewal of their policy, advising them whether or not to continue with the same insurer.
To assist customers in compiling the information needed when they take out an insurance policy and, in particular, when they make a claim.
Another important function of a broker, and one which is often delicate and complicated, is to ensure that the customer receives the compensation specified in the conditions of the policy, submitting a complaint if necessary.
Insurance broker: a highly qualified professional with very specific competences
Today insurance brokers are highly specialised and qualified professionals who need extensive experience and a range of skills to carry out their work correctly.
First of all, a broker must be a specialist not only in insurance but also in risk management. The broker must be very familiar with the potential risks that each customer can face, in order to advise them correctly.
An insurance broker must also have excellent communication skills and bargaining ability in order to mediate effectively between customers and insurers, resolving any conflicts that may arise.
The broker’s responsibility is very broad and is not limited to giving advice on the best insurance; brokers must ensure that the assets and property of their customers are taken care of at all times.
Furthermore, Spanish legislation requires a series of officially approved certificates for one to work legally as an insurance broker.
The main advantage of insurance brokers and the reason why it is advisable to employ them is that they have access to a wide variety of products and are in contact with various insurance companies, so they have a great deal of valuable information and, at the same time, they are sufficiently independent to offer the customer the most competitive policy that meets their needs.