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What is an insurance broker?

What is an insurance broker?

If you have ever wondered about the difference between and insurance broker and an insurer – our blog may be able to help.

So, what is an insurance broker and how are we different from an insurer?

The definition of an insurance broker is ‘a person or company registered as an adviser on matters of insurance and as an arranger of insurance cover with an insurer on behalf of a client’.

Insurance in the UK is big business. The UK insurance sector employed over 111,000 employees in 2017 and the UK has the largest insurance market in Europe and the 4th largest market worldwide. The British Association of Insurance Brokers has just shy of 2000 members who between them arrange 70% of all general insurance and 87% of commercial insurance.

OK, but what does a broker actually do?

Insurance brokers, like GM Insurance brokers, tend to specialise in providing insurance in certain fields or industries. GM insurance specialise in commercial insurance of all kinds, although we are specialists in the Waste, recycling and skip hire sectors. Brokers act as a middle man between the business and the insurer.

Why is a middle man necessary?

Often, a middle man in a transaction has the unfortunate effect of getting in the way, pushing up prices and generally being unnecessary. With insurance brokers though, this is not the case. As we have mentioned above, the UK insurance market is massive with a huge number of different insurance and policy types available. Insurance, especially insurance for businesses, is complex and the levels of choice can be pretty overwhelming. Most companies who require insurance are not insurance experts. When you are running a business you are less likely to have the time spare to research the market fully for your insurance, preferring to spend your time running your business!

An insurance broker on the other hand – is in the business of understanding the market and is much more likely to be on top of any new legislation, innovations or developments which relate to insurance in their particular, specialist sector. Crucially, a broker is able to work entirely on the behalf of the insurance buyer, not the insurance company. A broker will do all the legwork of finding the right cover at the right price which suits your particular needs

Your insurance broker is like a guide who can help to you navigate through the complicated world of insurance. We can also make the claims process easier too – read an example of the added value a broker can make in the claims process on our blog - Case Study - Aviva Claim

In summary then…

An insurance broker offers specialist market knowledge, access to a huge amount of insurance products and impartial advice, combined with ongoing support – including claim handling. Contrast this against going direct to an insurance provider which can only offer its own products and the extra value is obvious.

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