Insurance agents vs insurance brokers: What's the right choice for you?

Insurance Agent

Insurance is complicated. If you agree with this statement, then you’ve most likely gone through some facet of the process of purchasing or using an insurance policy. Perhaps you have tried to hunt down the ideal plan for a vehicle you love, or maybe you have had a fender bender in the past that required you to submit a claim. Whatever your insurance experience, you may have found that getting just about anything done with regards to insurance can be quite tricky.

Kwiksure realizes this, and we take every step to try to simplify insurance on behalf of our members. The very purpose of an insurance broker like Kwiksure is to do what insurance companies either cannot or will not do for clients, in fact. As such, we also realize that many people will gravitate towards third parties outside of the insurance companies themselves for assistance in purchasing and using insurance.

When it comes to this, there are basically two avenues to use: insurance brokers and insurance agents. How do these two terms differ, though; and how can you know which one is right for you? Read the article below to find out more.

Insurance companies and third parties

Insurance companies have been around for centuries now, and not long after they became quite numerous in number, others have had the idea to sell on behalf of different insurance companies in order to make commission. Insurance providers have been happy to go along with such an arrangement in order to sell more policies, capture more market share, and ensure that they have a chance to renew clients and maintain long lasting relationships with them.

On the other side of things, brokers and agents get the same benefit of repeat business in the form of commission, and are afforded the chance to sell more effectively as the result of insurers not charging more for the plans that they sell. However, this is where the similarities between these two groups end, for the most part.

The differences between brokers and agents

To be sure, there are a number of differences between insurance brokers and insurance agents that could be beneficial to know about the next time you are searching for insurance in Hong Kong, be it car insurance or other. Here are some of the biggest ones:

Relationship to insurers – This is perhaps the key differentiator when it comes to the divergence between insurance agents and brokers. An insurance agent will have an agreement in place with one or more insurers to sell their insurance products. In instances where an agent works with exclusively with a single insurance provider, the contract between the two may stipulate that the agent only sell the single insurer’s products exclusively.

Brokers, on the other hand, will inevitably work with a number of different insurance providers. For a broker, the more insurance companies and products they can sell the better. They do not have exclusivity deals with insurers, as a large part of the attraction of using a broker is getting to compare plans from numerous providers. This leads to agents having closer ties to the specific insurers that they work with when compared with brokers.

Complexity – When searching for health insurance, you might find working with a broker to be a bit more complicated than working with an agent. This is mainly because there is so much more to sift through with a broker.

While agents will highlight the most appropriate plans from the limited number of insurance companies they work with, insurance brokers must analyze numerous plans from numerous insurers in order to come up with the ideal plan options for a potential client. While this is something a broker is able to do very efficiently, given that it is their daily business, it can still be somewhat overwhelming for consumers using their services.

This also means, however, that brokers can provide you with different plans from different insurers at the same time in order to give you a bespoke insurance solution. An agent will have to tailor a plan for you using a more limited set of products.

Resources – Another difference between agents and brokers is that agents are often individuals that work outside of an office setting, or – even if they do have an office – they may have limited people assisting them with their clients. Brokers, on the other hand, are much more likely to have a full team and different departments supporting them.

This can lead to improved services for clients of insurance brokers, as they will have people to reach out to if their first point of contact is not available, as well as access to value added services like online insurance portals and other digital resources.

Working on behalf of customers – This one may be debated by the parties in question, but to most it should be plain to see that insurance brokers are more motivated to work on behalf of their clients, as opposed to on behalf of the insurers, than insurance agents are.

Since agents have a limited number of insurance companies that they partner with (oftentimes only one), it is important for them to serve these companies well in order to maintain the closest possible relationship with them, and obtain preferential opportunities.

With insurance brokers, clients are the main focus, as even if a customer decides that they want to switch their insurance provider, the broker can still continue on as the client’s insurance intermediary. Furthermore, since an insurance broker is already selling plans from a number of different insurers, the insurers do not have high expectations for brokers.

Licensing – Most areas will require that agents and brokers both have some form of certification, and Hong Kong is no different. Just be aware that each may have its own individual governing bodies, with different rules that must be adhered to in order to become and remain certified.

Contact us

Now that you know more about the differences between insurance brokers and insurance agents, hopefully you feel that you have a handle on which direction you should go if you want to utilize the services or a particular third party insurance seller. If you have decided that an experienced insurance broker is the way to go, or if you even still have questions related to this article or just insurance in general, contact us today!

Whichever option you choose, the most important thing is that you work with people that you trust, and who will go the extra mile to provide you with great service. Our helpful insurance advisers are always happy to provide you with answers to any questions you may have, give you a comparison of the best possible plans from top local and global insurers for your needs, and supply you with a free price quote.