Results 1 to 4 of 4
Discuss The Role of Car Insurance Brokers in the Finance and Insurance forum at Car Dealer Forums; The role of a car insurance broker is to act as an intermediary between the ...
  1. #1
    Member
    Join Date
    Sep 2010
    Posts
    38

    Arrow The Role of Car Insurance Brokers

    The role of a car insurance broker is to act as an intermediary between the customer and the underwriting Insurance Company. Within this role there are various functions that they carry out in interaction both with the car insurance buying public and the Insurer with who they place the business.


    When a broker places car and motor insurance risks on cover, their role has a major difference to other types of insurance in that the spread of risk is smaller. This is because a very high proportion of motor business is eventually placed on the basis of 'one risk, one underwriter' - that is to say, a Lloyd's underwriter or Motor Insurance company.


    When a member of the public goes to a motor insurance broker they expect that the broker should be fully aware of all the covers available and offered in a standard car insurance policy and a commercial motor policy. A broker also should be knowledgeable about the differences in policies and prices offered by the various Insurance Companies and underwriters with which his brokerage does business.


    The Car Insurance Brokers role does not just stop with the supplying and purchasing of the insurance. They should be available to act as an intermediary with the Insurer at any time, acting upon the client's behalf should there be any changes to the policy mid-term of the contract period, or to deal with any claims that need to be made.


    The two main insurance areas dealt with by the car insurance broker are the private individual's motor policy and the commercial fleet motor policy.


    A marked tendency in the large broking house during recent years has been to concentrate more and more on the commercial motor insurance fleet placings, and less and less on the private sector of the market.


    Many large international insurance brokers view the private motor insurance as uneconomic for a fully sustainable business, and so specialist sub-brokers or large provincial and regional brokers are dealing with a greater proportion of this class of motor business.


    Car Insurance Brokers receive commissions for their role as intermediaries which are received from the Insurance companies with which the business is placed. The commissions available in the motor market varies somewhat and the recent 'soft market' where premiums and commissions are low, have also led the high street insurance broker to seek more profitable business in insurance classes other than Motor. Commissions for a car insurance policy may range from 7 per cent to 20 per cent although with commercial vehicle contracts and large fleet business, brokerage may be agreed on a fee basis which is often charged over the whole portfolio for that particular client. In the past a standard rate or tariff which was agreed and reviewed by the Association of British Insurers professional body (ABI) was used in the UK car insurance market. This is no longer the case, but this approach still influences some underwriters in some specialist car insurance areas.


    In recent years, however, many larger brokers have developed what is known as a 'direct dealing account'. This is where the broker introduces a sub-broker to underwriters and then permits him to deal directly with them under a fronting agreement with their own marketing. The accounts, however, will still pass through the main broker. The commission is split between the main broker and the sub-broker, with the sub-broker usually commanding the higher percentage. An important restriction applied to the sub-broker within the fronting agreement is that he must pass the premium on to the main broker within 30 days of inception of the risk.


    The role of the motor broker has changed somewhat in recent years with the development of Internet based quotation systems.


    In particular the insurance comparison websites who have taken over the role of the broker to some extent. These quotation systems have been used successfully however by some car insurance brokers who have adapted and embraced the technology and now offer full on-line comparison quotes from their panels of insurance providers. The benefits are a very quick service, although it may still be advantageous for the broker to 'shop around' for the best deal for one's client, particularly if the cover is for a non standard driver or car.


    Whatever the changes in the technologies and methods of Car Insurance delivery there will always be clients who want a human face and to talk to someone directly about their insurance needs. The role of the broker is ultimately communication.


    › See More: The Role of Car Insurance Brokers

  2. #2
    Junior Member
    Join Date
    Jan 2011
    Posts
    9

    Default

    Thanks for letting me know, great post!

  3. #3
    Junior Member
    Join Date
    Jun 2011
    Location
    India
    Posts
    2

    Default

    I appreciate this detailed article. I agree that having a car insurance broker can provide you many benefits. After all he is one of the people who can easily understand your insurance needs and work according to it.



  4. #4
    Member
    Join Date
    Jan 2012
    Posts
    49

    Default

    There may be a broker which will be held responsible for the selling of insurance, underwriting company will be best thing to search for insurance.

Similar Threads

  1. Who is YOUR role model
    By Mike Hunter in forum alt.autos.gm
    Replies: 0
    Last Post: 12-19-2008, 11:33 PM
  2. Who is YOUR role model?
    By Mike Hunter in forum alt.autos.ford
    Replies: 0
    Last Post: 12-19-2008, 04:30 PM
  3. Replies: 0
    Last Post: 01-28-2008, 10:42 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •