Welcome, my fellow readers. My name is Risky Biscuit and I am an insurance underwriter based in the San Francisco Bay Area. I created the Professional Series to illustrate the kinds of jobs that exist within the insurance industry. For the second piece of the series, I present to you a type of job called insurance broker.
And no, a broker is not someone who is financially broke. An insurance broker is a middleman that brings client requests for insurance policies to insurance carriers. Insurance brokers earn money from commission and/or a fee (varies by state law) charged on each insurance policy purchased by his or her clients.
A seasoned insurance broker is an excellent negotiator, good communicator and knowledgeable professional who is a capable client's advocate. Their abilities to juggle client needs, underwriter reasonings and marketing pressures can really put The Devil Wears Prada to shame.
Although I have never worked as a broker in the past, my experience working with several different brokers has helped me improve as an insurance underwriter. Usually, brokers are informed of their clients' insurance needs and know coverage details inside and out. Every insurance quotation I send out, the broker will literally comb through the documents with a fine-tooth comb. If there are any questions regarding coverage terms or rates used for pricing, I am not required to answer the questions on the spot, but I am expected to address those questions in the best way possible.
When the coverage conditions and insurance rates are exactly what the brokers needed, the world is all roses and sunshine. But when the brokers feel dissatisfied with either the rates and/or the coverages, it literally becomes a battle between a storm and a ship at sea, and the outcome of this battle will help determine many business outcomes. Within an insurance company's risk comfort level, per the broker's request, the underwriter can choose to make a concession on the rates and/or the coverage conditions. From what I understand, at least in the commercial insurance field, how the concession is made largely varies due to industry category and exposure size.
While insurance brokers play the roles of middlemen, they are not malicious business meddlers who always try to take a cut out of any transaction. Within the United States, insurance brokers are regulated on a state level. In most cases, a person must obtain an insurance broker license and a background check before working as a broker. Any activity showing untrustworthiness or incompetence could lead to the revocation or suspension of a broker's professional license. In other words, the barriers of entry into the insurance broker profession are moderate, but the level of difficulty just to stay in the profession is pretty high.
If you own a company that has complex risk types, or if you own a valuable collection of property or cars, you can really justify the expense of hiring an insurance broker to help you shop for insurance policies. Since insurance is heavily regulated, a competent broker can help you find suitable insurance policies rather efficiently. Really, what more can you ask for if you are able to hire a broker who is not only knowledgeable but also someone you can count on to advocate for your insurance needs?
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