Insurance brokers and agents as intermediaries in the insurance value chain are indispensable, and accounts for why forward looking underwriter’s court and partner with them.
The insurance brokers and agents account for about 80 percent of the total market share, with latest figures from Augusto & Co. report showing 54 percent for brokers and 26 percent for agents.
The rating agency therefore in its analysis of gross premium income (GPI) distribution by channels, show that brokers and agents were far away followed by ‘direct business’ and bancassurance, with both contributing 7 percent each.
E-channels also contributed mere 0.4 percent, again showing how poorly technology is serving the industry, when you compare it with other financial services sector players. While, other platforms jointly contributed 6 percent.
Insurance is a technical subject, underscoring why somebody going into is usually advised to get the services of an insurance broker.
The insurance brokers by virtue of their profession understand the deal and can mediate for you to undertake an insurance contract successfully.
Just like an accountant or lawyer who provides you with professional advice based on years of training and experience, a qualified broker can do the same with your insurance.
One interesting thing about using the services of a broker is the fact that, you the insured is not going to pay the broker for his services, but is paid by the underwriting company that gets the business, says Tope Adaramola, assistant executive secretary of the Nigerian Council of Registered Insurance Brokers.
Adaramola said using the insurance broker can save you money, stress and time which would have been spent moving about to secure the insurance cover, and at the same time you are opportune to get professional advice on the right polices that best suit your situation.
Like the experts put it, when arranging insurance, many people take shortcuts without seeking proper advice, understanding the fine print or considering whether they are getting value for money. Often they end up with cover they don’t need and – even worse – without the cover they really need.
Using a broker doesn’t necessarily cost more. Often it costs less because brokers have knowledge of the insurance market and the ability to negotiate competitive premiums on behalf of their client.
A broker will also explain your policy and any special situations you need to watch out for. Furthermore, a broker is obliged to advise you of fees charged for services provided to you.
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