Author – George Jennings
Invaluable intellectual asset
An insurance broker / intermediary / Financial Services Provider (hereinafter referred to as the broker) is probably one of the most valuable “intellectual assets” to have on your side when it comes to building your short-term insurance portfolio.
In a world of highly complicated insurance products, is it worth taking any risk without having a skilled professional and trained broker to help you set the policy foundations? No, it is simply not worth it when one considers the value-added services a broker brings to the table.
Brokers are normally remunerated by a regulated commission paid by the insurer. The brokerage (as it is commonly known) is earned by the broker for every policy transaction which is processed via the broker. Such regulated brokerage is the maximum amount the insurer is liable to pay to brokers for their services performed.
Regulated insurance industry
It is important to recognise that the insurance industry is regulated by the Financial Services Conduct Authority (FSCA). The FSCA, registered in April 2018, replaced the previously known, Financial Services Board (FSB). The role of the FSCA is to monitor and control local financial markets, as well as to ensure that clients are treated fairly by the financial institutions. The FSCA also focuses on and assists in overseeing the financial stability of these institutions.
The FSCA requires the broker to adhere to its regulations and strict Code of Conduct.
Align products and needs
Brokers, without doubt, perform an integral role in providing valuable advice and support to their clients. They have a wealth of experience and can make your life a lot easier in being able to offer you a full spectrum of insurance products and services. One of the primary functions of your insurance broker is to conduct a complete needs analysis of your risks and exposures that could potentially lead to major material or financial loss. Your broker will highlight and recommend which product or products are best suited for your needs and will afford you the right protection in the event of being faced with an unexpected, sudden or unforeseen accident or misfortune.
The broker can be likened to that of a “go-to person” who is “there for you”. The products he offers will be customised to help “plug” a potential gap or exposure you could be faced with. One draw-back (through no fault of the broker), is that there are risks and exposures that the insurance industry is unable to accommodate or can only mitigate to a certain degree. Once identified, your broker will be able to guide you, and if needs be, canvass all available markets in search of a solution or remedy.
Several broking organisations also offer “in-house” specialist services such as (but not limited to) risk management and mitigation measures. The specialist services include risk surveys with technology that can help you navigate your way around eliminating or reducing your exposure to risk and perils. Some of these value-added specialist services come with a price tag, but depending on whether you are on your own, a small to medium enterprise, or a corporate entity, these services can be invaluable to you.
Not all brokers can afford to employ niche market specialists. The majority of brokers deal with the insurance market as a whole and rely on the specialist underwriters, such as CONSORT TECHNICAL UNDERWRITERS, to assist them and share knowledge with them in their specialist field.
The world and technology are changing, and without a broker on your side, you may encounter difficulties and challenges if placed in a position or predicament of misfortune. Remember broker services are free to you as insured.
Forewarned, forearmed: to be prepared for risk is half the victory. (Adapted from Miguel de Cervantes’ original quote, 1547-1616)