The function of Insurance coverage Brokers in India

Insurance brokers connect firms and businesses. Insurance broking has been operating for decades internationally but has only recently been introduced in India.

The role of these broker has with time, gone from just connecting companies to businesses to now offering many other value-added services. Apart from the structuring and placement of insurance cover, these value-added services include such things as claims management, alternative risk transfer mechanisms, risk management, pre-emergency planning and evacuation, HR outsourcing, employee-benefit solutions, actuarial services, business continuity planning, and political & environment risk advice.

Benefits of Availing Insurance Brokering

There are many benefits to making use of the services:

  • For one, these brokers in India represent not the insurers, but the client, and can thus provide valuable advice and insight to clients.
  • They are also highly-trained and seasoned professionals that bring significant expertise, knowledge of the market, and negotiating skills.
  • These brokers in India can be held liable for professional negligence with respect to dealings with clients.
  • In addition, these brokers in India keep themselves up-to-date with new developments in the national and international markets.
  • They have specialized experience in quickly and fairly settling claims and are trained and experienced in assessing the various insurance companies with respect to coverage, services, and price; thus, they enable healthy competition to flourish between firms that lead to direct benefits to the customer.

Functions of Insurance Broker as per IRDA

These brokers in India must be licensed by the IRDA which regulates insurance broking activities in India. The function of these brokers has been defined by IRDA, and must include,

A direct broker’s functions include,

  • Obtaining comprehensive information about the client’s business and risk management philosophy;
  • Familiarising with the client’s business and underwriting data, to explain to the insurer and others;
  • Offering advice on the appropriate insurance cover and terms;
  • Upholding detailed knowledge of available insurance in the markets, as applicable;
  • Submitting quotes received from insurer/s for consideration of clients;
  • Providing necessary underwriting information as required by an insurer, for assessing the risk & decide pricing terms and conditions for cover;
  • Acting promptly on directives from a client and providing the client written acknowledgements and progress reports;
  • Assisting clients in paying a premium under section 64VB of Insurance Act, 1938 (4 of 1938);
  • Offering services related to insurance consultancy and risk management;
  • Supporting negotiations of the claims; and maintaining records of the same.

Insurance broking companies in India, play an important role in bringing companies and businesses together by offering numerous vital services. When the Indian economy opens up, the usefulness of insurance brokerage shall continue to grow.

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