Define Insurance Broker
Insurance is an agreement between an individual or corporation and an insurance company. Under an insurance agreement, the insurance company agrees to cover expenses related to loss or injury in return for a fee called a premium. However, there are many different kinds of insurance (e.g., liability, property), and it can be difficult to choose what policy is best. Insurance brokers try to make insurance choices simpler for potential policy holders.
Other People Are Reading
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Definition
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As shown by Investorwords.com, an insurance broker is an insurance professional who comparison shops to find someone the best insurance policy. They do much the same work that insurance agents do, but unlike insurance agents, insurance brokers work independently and do not represent any one insurance company. Instead, they represent the policy holder. This can be advantageous because the broker is not compelled to side with their employer in the event of an insurance claim.
Major Duties
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The United States Bureau of Labor Statistics (BLS), The Princeton Review and Stateuniversity.com indicate that insurance professionals research what policies are available for the policy holder from different companies. They explain what each policy covers and answer questions the policy holder may have about policy terms and conditions. Insurance agents also assist policy holders with filling out necessary paperwork. They may investigate and settle claims. Insurance brokers have to keep detailed records of all of their policies and related transactions.
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Education
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According to Stateuniversity.com and the BLS, insurance brokers must have a minimum of a high school diploma. Most insurance professionals have at least some college, with many having a bachelor's degree. An insurance broker may make up for educational deficiencies with relevant sales experience. Insurance brokers have to have a broker's license in the state where they work. Other certifications in specific types of insurance are valuable but are not required.
Skills
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Insurance brokers must be organized. They must be knowledgeable in insurance law. Insurance brokers must also have excellent communication and persuasive skills, since they have to put complex policies into layman's terms and convince a policy holder to buy. They should be comfortable with computers and math, since technology has changed the way all insurance agents access and record insurance data, and since the insurance broker has to be able to calculate the costs of premiums.
Job Outlook and Salary
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According to Stateuniversity.com, the typical insurance broker makes just under $42,000 per year. This figure is similar to 2008 data from the BLS, which indicates that an insurance broker may earn a median wage of approximately $44,500. Notedly, insurance brokers, unlike insurance agents, usually work on commission only, meaning that their income may increase proportionately to the amount of sales they can close. Insurance brokers may not have some benefits agents enjoy like employer-supplied health coverage. The job outlook for insurance brokers is average when compared to other occupations, as employment is expected to rise by 12 percent through 2018.
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References
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