Who is an insurance broker?

The main objective of the insurance broker is not the conclusion of an insurance contract, but insurance of the interests of the company in the conclusion and the duration of the insurance contract.

The insurance market offers a wide range of options for companies to choose insurance that best suits their needs.

Due to the nature of theoretical and practical options for choosing the right insurance, companies increasingly need professional help and advice from those who are professionally qualified, and, as advisors and brokers between the company and the insurance company, contribute to the quality conclusion of the insurance contract.

This is done by insurance brokers, who, at the same time, monitor the exercise of rights and obligations arising from an insurance relationship over the duration of the contract.

How can an insurance broker help the company?

The insurance broker is qualified for professional insurance consulting and mediation when concluding an insurance contract:

• risk management consulting and individual risk analysis, as well as assessing the possibility of insurance of individual risks in terms of the conditions of individual insurance companies,
• creating appropriate hazard analysis for companies and appropriate pruning principles for dangers that threaten the company,
• creating the most appropriate offer for concluding an insurance contract and taking care of obtaining adequate insurance cover,
• mediating the needs of the company, as a rule, to several insurance companies,
• warning of changes in the duration of the insurance contract,
• technical and business realization of the insurance relationship in the form of delivery of the insurance policy, examination of the contents of the policy and insurance conditions,
• organized and recorded insurance brokerage services.

Tasks and role of an insurance broker

Under the Insurance Act, an insurance broker is the person who mediates in the conclusion of insurance contracts for one or more insurance companies and seeks to bring the company in contact with an insurance company in order to negotiate with it for the conclusion of an insurance contract.

The insurance broker must provide the company with assistance in the exercise of rights under the insurance contract over its duration, thus helping in the event of an insurance case arising that the company receives insurance and advising when it is necessary to modify the insurance due to a change in the insured risk.

The basic services are consulting services, provided by the insurance broker to the company.

The economic objective of the insurance broker is to reduce the company’s costs and manage its risk, which means not only reduction of insurance premiums, but also analysis of the risks, that threaten the company and the identification, of which risks the company can control by itself and which risks can be transferred to the insurance company.

The insurance broker must provide the company with assistance in the exercise of rights under the insurance contract over its duration, thus helping in the event of an insurance case arising that the company receives insurance and advising when it is necessary to modify the insurance due to a change in the insured risk.

The insurance broker protects the interests of the company in several ways, by exploring the market, managing market information about operating insurance companies and their services, and determining the possibilities of providing insurance coverage for individual types of risks. Therefore, he must have a general knowledge of the complete insurance market and must know how to handle dangers that threaten people and their property.

The insurance broker is effective only if it is a joint venture between him, a company and an insurance company based on mutual trust, which is the most essential and sensitive component of insurance brokerage.

SOURCE: Ivanjko, Š., Ristin, G., Musil, M., Bubnič, E. in Fric, L. (2014). Učbenik za zavarovalne zastopnike in zavarovalne posrednike, Del:4: Znanje za posle zavarovalnega posredovanja. Ljubljana: Slovensko zavarovalno združenje, g. i. Z..