14/03/2023
Insurance Broker and Insurance Agent
When you as a customer are trying to obtain an insurance product you are most likely be meeting with an insurance broker or an insurance agent. Both of which have an important role in extending insurance products to the masses, with certain differences in the roles they play and the services they provide.
Today we will be talking about the differences of these 2 distribution channels within the Indonesia insurance industry so that you as a potential buyer will have a comprehensive and a more informed base as to decide who you work with to get your insurance coverage.
What does an insurance broker do and their service?
An insurance broker (as individuals) is highly regulated by Indonesia Monetary Services Authority (Otoritas Jasa Keuangan-OJK), and therefore a licensed professional who has obtained and/or passed a certain qualification as set out by OJK. Based on POJK 68, POJK 70 and POJK 73 an insurance broker will need to have qualifications in line with their roles in the market. Brokers act as intermediaries between insurance companies and their customers (policy holders), delivering added value by ensuring that their customers get the right package of insurance coverage at a certain price point. Brokers are responsible for providing the necessary information to the customers so as to make informed decisions regarding policies and coverage. All the while brokers also provide risk management to the customers, helping them in identifying potential exposures, explaining wordings, terms and conditions within the policies, formulating strategies for mitigating risks and develop financial plans in safeguarding against unforeseen circumstances.
The services a broker can provide would include services designed to protect customer and their organisation from certain financial losses, a broker specialises in helping the customer to find the right combination of premium, coverage and risk management to suit their needs. Their expertise would go beyond just finding products on the market, but also explaining complex wording , terms and conditions, helping identify extra exposures not covered, assess those risks and develop alternative risk mitigating processes needed to cover those gap. More often than not an insurance broker will also be well versed in the regulation and legal aspects of insurance procurement licensing within the insurance industry. This is one key advantage they would have over the other distribution channel. By working with an insurance broker, customers would have a separate expert in getting additional protection from unforeseen risks that may sometimes be overlooked when buying directly from insurers.
On to the next one then, what does an insurance agent do?
An insurance agent is also a licensed professional who works for a single insurance company and sell their products. Agents are responsible for providing their customers information about the insurance company they work for, coverage options, rates, premiums. While they will able to provide advice on which policy to choose, they cannot offer independent advice on behalf of another insurance company as it would be considered a conflict of interest, and hence their primary goal is to increase profits and sales for the insurance company they are employed at.
Benefits of an insurance broker over agents
As we can see from the explanation above, insurance brokers provide plenty more services over insurance agents, one of the most prominent is that brokers provide informed advice to their customers. By analysing and advicing while having discussion with clients of their needs, they can recommend policies which provides more extensive coverage. Brokers also have multitude of connections within the industry, allowing them to find deals and better terms across the industry which ensures cost efficiency. Additionally, brokers are independently owned and operated, thus providing the additional assurance that their policies are guided by unbiased decision making in their recommendations to the customer. These aspects will prove brokers as invaluable partners with the customers especially those looking for personalised service when selecting their insurance products and coverage.
Lastly, how an insurance broker can help you get the best coverage for your needs?
Insurance brokers are expert in finding the best coverage to meet your needs and budget. Unlike insurance agents who work for one insurance company, brokers are allowed by OJK regulations to provide policy offerings from different insurance providers. This means you are provided with comparisons of multiple options so you can choose the best one for you. Brokers understand complex insurance wordings / language and can walk you through those hurdles in simple plain language so you know that your back is covered no matter how challenging your situation is.
If you are looking for adequate protection and coverage, you need to be speaking with an insurance broker now!. here at PT. Bhinneka Cipta Lestari insurance broker, we understand the importance of having insurance cover in a timely and effective manner.
Contact us today to learn more about how we can help you get the best cover for you and your business.
Let us worry about insurance so you can focus on what matters most, your business.
