What is an insurance broker? How is a broker different to an insurer? And how are we regulated? Find out what insurance brokers do in our brief explainer.
The UK insurance industry is the biggest in Europe according to Statista, and the fourth largest in the world. Over 3,000 insurance brokers operate here – Simply Business one of the many – with the City of London home to numerous brokers with all sorts of peculiar specialisms, from mobile phones to professional footballers.
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If you’re entirely new to insurance you might not be clear about what we do, so here’s a quick summary to help you get to grips with the basics of insurance brokerage.
Insurance broker definition
A company (or person) registered as an adviser on insurance matters, and to help set up cover for a customer with the insurer of their choice.
That’s a formal dictionary definition, but what do insurance brokers do, in reality?
Insurance broker vs. insurer
Insurance brokers aren’t the same as insurers. Our job is to show you cover options, find you an insurer and help you make and manage a claim, but responsibility for the risk associated with your policy sits with the insurer.
In practice this means that while we work to pair you with the insurer who fits well with your business or rental, and work with you if you have to claim, we’re not the ones who pay out when a claim is made.
So what role do we play as an insurance broker, exactly?
Insurance brokers are insurance experts that tend to specialise in certain fields – in our case business insurance and landlord insurance. Our role is to negotiate with insurers to help you get a better deal.
We’re authorised and regulated by the Financial Conduct Authority (FCA), who have a strict set of rules that insurance brokers have to follow. This means that we always act in the best interests of customers searching for insurance.
We act on behalf of buyer, rather than insurer, and do all the legwork involved in finding a policy specific to you. And we can go pretty specific, too. If your business is niche or obscure, it’s down to us to find a policy that meets your particular needs.
Essentially, a broker is (or should be) a guiding hand in the complex world of insurance. We provide a range of quotes, arrange the right cover and make the claims process simpler.
We’re registered as ‘non-advisory’ with the FCA, which prevents us from giving personal advice or giving you recommendations. This does mean that we’re impartial, unlike direct insurers, and at Simply Business our service doesn’t stop the moment you get your quote and buy your insurance. If you have any questions or need support throughout your cover, our experts can help – and we’ll handle everything if you need to make a claim.
Given that we were awarded Broker of the Year at the 2019 Commercial Insurance Awards, we think we’re on the right track, too.
How do we benefit from brokering your insurance?
In return for bringing customer and insurer together brokers receive a commission, which tends to vary on the scope and nature of a policy. Ultimately, our aim is to strike a deal that keeps both customer and insurer happy.