What is the role of an insurance broker? (Plus skills)

Updated 1 August 2023

Insurance brokers focus on selling, soliciting and negotiating insurance on behalf of clients, ensuring they receive compensation. This rewarding position requires extensive knowledge of insurance organisations and their policies to help clients find ideal options. If you wish to become an insurance broker, understanding what the role entails, including its primary duties, is crucial to finding success. In this article, we discuss the role of an insurance broker, including their responsibilities, educational requirements and skills.

What is the role of an insurance broker?

The role of an insurance broker refers to the duties these professionals perform on a day-to-day basis to meet client needs. These duties vary depending on the client, but they're based around finding suitable insurance packages for individuals and organisations. The responsibilities range from general tasks such as handling transactions for insurance products to specific responsibilities such as mitigating different types of insurance risks.

11 responsibilities of insurance brokers

Here are 11 primary duties of an insurance broker:

1. Selling insurance plans

Insurance brokers are responsible for selling insurance plans to customers. They interview prospective clients to assess the physical condition of their properties and collect information on their financial resources and requirements. Using this information, they help customers find ideal insurance packages that provide the perfect coverage. Insurance brokers also carry out comparison-shopping and manage huge portfolios to ensure clients receive the most reasonable deals possible. They normally recommend ways clients might lower their insurance costs and manage policies by assisting with changes, renewals and cancellations.

2. Assessing risk

Insurance brokers assess different types of risks that insurance organisations may encounter. These include natural disasters like floods, tornados, car accidents and credit risks. They help clients understand these risks and how to manage them. Insurance brokers then suggest risk mitigation mechanisms such as placement with risk retention, risk purchasing group and formation of captive in a company. Insurance brokers also help prospective clients know the limitations present in insurance policies and how to prepare accordingly to avoid losses.

3. Scheduling and attending meetings

Insurance brokers schedule and attend meetings with clients and insurers. These meetings help them assess the client's current and future needs while allowing them to build and maintain healthy relationships. In these meetings, they talk clients through their options, ensuring they understand their choices and ultimately help them choose ideal packages. Insurance brokers also attend insurer meetings to stay current with insurance trends and changes. This ensures they're able to access the latest technology tools to increase efficiency and effectiveness.

4. Keeping and maintaining records

Insurance brokers are in charge of keeping and maintaining client records. These records help prove that any advice provided is sufficient and appropriate in case of allegations. Insurance brokers also use bookkeeping systems to plan and supervise the inclusion of insurance programs into organisations. They explain bookkeeping requirements such as photos, receipts and medical records to clients, which are useful when filing claims.

5. Liaising between insurers and clients

Insurance brokers act as intermediaries between clients and insurance providers. They maintain a clear flow of communication between both parties to facilitate and expedite claim processes. Insurance brokers normally update clients on claim decisions and inform them about the progress and status of their applications. They also monitor and ensure clients and insurers settle claims amicably. They often work to decipher complex insurance terms and concepts for clients, ensuring they understand everything, including the extent of a cover and their rights.

6. Advising clients

Insurance brokers provide a range of insurance-related advice to individual clients. This includes advice on financial management, business and client sales. They provide a detailed analysis of current options available to customers and suggest possible options to pursue. Insurance brokers usually gather information from clients, such as their financial situation, financial product experience and objectives. Through this, they're able to give the most appropriate advice regarding insurance products. They also provide organisations with information relating to compliance and administration projects. They work closely with underwriters to assess risk to determine the ideal products for clients.

7. Handling administrative tasks

Insurance brokers often handle certain administrative tasks for their customers. This includes corresponding with an insurer, managing property inspections and determining the right insurance policies for clients. They have exceptional time management and organisational skills to help clients file official insurance-related paperwork, such as claims. Insurance brokers also arrange insurance covers by handling paperwork and following technical procedures required by insurers. They help expedite claims while providing timely customer service to maximise a customer's assets.

8. Linking new clients with insurance companies

Insurance brokers normally link insurance providers with clients. They help clients find suitable insurance coverage based on their needs and requirements and, in turn, generate new business for the insurance organisation. Insurance brokers provide customers with quotes from different providers, giving them a wide range of options to choose from to suit their needs and financial budget. Some insurance brokers may collaborate with insurance providers to offer clients lower rates on insurance packages.

9. Complying with legal requirements

Insurance brokers comply with legal requirements and guidelines in their jurisdiction. This includes obtaining licenses required to sell insurance and renewing them as stipulated in the law. They also obtain the necessary certification and licenses required to operate in many locations, including business insurance. Insurance brokers have an in-depth understanding of regulatory and legislative laws and always stay up-to-date with policy changes. They also ensure clients meet policy requirements and act in good faith to help clients find ideal policies for their needs.

10. Preparing reports for underwriters

Insurance brokers often prepare reports for underwriters. These reports help insurance providers assess the risks and profitability associated with offering a policy to a client. This analysis applies to insuring a home, driver, or client's health. After knowing the risk involved, insurance organisations then charge insurance premiums based on the amount of risk. The reports that insurance brokers prepare help insurance organisations determine the acceptable level of risk they're able to take on without going bankrupt.

11. Collecting premiums

Insurance brokers help insurance providers collect premiums from policyholders. This is the amount the policyholder pays for an insurance policy, depending on various factors such as their age, credit history and financial resources. They ensure clients pay premiums on time and suggest affordable policies based on their financial situation. Insurance brokers also inform clients of premium payment options, such as making weekly, monthly or annual payments.

Insurance broker educational requirements

There are three routes to consider when looking to become an insurance broker:

University

Earning a degree in accounting, finance, management, business or economics is the standard route to becoming an insurance broker. These degrees help you develop industry knowledge and equip you with essential skills. While you don't necessarily require a bachelor's degree to pursue a career as an insurance broker, having one improves your employability.

Apprenticeship

Employers are usually more interested in a candidate's experience and skills when looking to fill a position. An easy way to achieve this is by completing an insurance broker apprenticeship. Insurance broker apprenticeships mix study with practical experience, improving your competency. They also give you an advantage over other candidates, increasing your chances of landing the role. During your apprenticeship, expect to work under the close guidance and supervision of a senior insurance broker.

Entry-level work

Insurance organisations often take on trainees to help perform general tasks. Take this opportunity to enter the insurance field and work your way up to the level of an insurance broker over time. You may start working as a junior account handler, trainee broker or insurance technician before getting promoted to more senior roles. It's advisable to learn as much as possible by shadowing senior professionals within the organisation.

Insurance broker skills

Here are some of the skills you require to become an insurance broker:

good organisational and time-management skills to effectively handle multiple clients simultaneously and keep large volumes of records
ability to pay attention to details to identify and correct errors with policies and packages
strong communication and listening skills to get ideas across easily and collaborate with others
excellent negotiation skills to help policyholders find ideal insurance packages
good with numbers to ensure accuracy with mathematical calculations
ability to interact and get along with people of all backgrounds, personalities and ages
ability to quickly analyse a situation and find solutions
ability to negotiate and persuade clients
ability to read and comprehend complex languages
ability to gauge options ad make informed decisions
knowledge of basic computer software applications and tools

What is the role of an insurance broker? (Plus skills)