The difference between an insurance broker and an agent.

It is in the interests of the insurance agent to facilitate the conclusion by the policyholders of as many contracts as possible with the company with which he is associated with the contract (in order for the company to continue cooperation with him and further).

As a rule, insurance agents know almost everything about the organization, whose interests they represent, but they are not as good at information about the state of affairs in the market as a whole, as brokers. Their competence is not so wide - the agent rarely engages in activities that are not related to intermediary services.

Citizens with the status of individuals, as well as small organizations, most often work with insurance agents, since the main thing for them is to insure their property at favorable rates and at the same time not to overpay for the commission paid to the intermediary.

Increased attention to the quality of elaboration of contracts in this case may not be given - for the reason that they mainly contain standard formulations generally accepted for the entire market. In principle, insurance of types of property typical for individuals and small businesses does not require the conclusion of particularly complex contracts.

Comparison

The main difference between an insurance broker and an agent is that the former is a legally independent person from any firms, the latter has a contract (labor or contract) with a certain company. The broker is interested in selling the highest quality and most suitable service to the policyholder, the agent is interested in the one provided by his employer or customer.

A broker is likely to operate as an individual entrepreneur or a business entity. This is mainly due to the specifics of the legal relationship of specialists of this profile with insurance companies, as well as taxation. The agent, as a rule, is an individual, sometimes - an individual entrepreneur, quite rarely - a business entity. The reasons are the same - the peculiarities of the legal interaction of a specialist with an insurance company, as well as the specifics of taxation of the services provided by the agent.

Of course, one and the same specialist in the insurance market is capable of being both a broker and an agent at the same time - the law does not prohibit him from this. But provided that the agency contract does not impose restrictions on it or does not imply objective obstacles (for example, in the form of an obligation to work for an insurance company 8 hours a day, if the contract is drawn up according to the Labor Code, in this case the person simply may not have time for another job).

Consequently, the terms “broker” and “agent” can also be considered not only as denoting professions, but also as corresponding to the types of human activity in the insurance market. A competent person can deal with them at the same time.

Having determined what is the difference between an insurance broker and an agent, let us fix its key criteria in the table.

Table

Insurance broker Insurance agent
What do they have in common?
Both act as intermediaries between insurance companies and policyholders, receiving a commission for their work
What is the difference between them?
Legally independent from insurance companiesAs a rule, legally associated with an insurance company - through an employment or civil contract
Interested in selling the best offer on the market to the client in order to be able to work with him in the futureInterested in selling the services of his company to the client in order to be able to work with it in the future
Most often is an individual entrepreneur or a representative of a business societyMost often an individual
As an intermediary may be preferable for medium and large businessesAs an intermediary, most often in demand by individuals and small businesses
Can engage in activities not directly related to intermediary servicesAs a rule, does not engage in other activities, other than the provision of intermediary services
.