Differences Between Insurance Agent and Broker

Insurance agents and brokers are generally used as a common word for selling insurance policies to customers. Although both sell insurance products and earn a commission based on the sales, there are differences in how the industry perceives the two.

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  • An insurance agent acts as an intermediary between the insurance company and the customer and sells various products such as health insurance, auto insurance, life insurance, etc. In contrast, the insurance broker sells and negotiates the insurance compensation on behalf of the customer and acts as an independent party between the insurance company and the customer.A broker has a higher responsibility toward the customer to provide the best financial product that suits the customer’s needs.

Insurance Agent vs Insurance Broker Infographics

Let us see the top differences between an insurance agent and a broker.

Key Differences

The key differences are as follows: –

  • An insurance agent represents one particular company, whereas brokers represent the customer.Insurance agents sell a product of one insurance company only, whereas brokers sell products of different companies.Insurance agents try to build the company’s image; however, brokers try to sell the best product that suits the client’s needs irrespective of the company.Insurance agents receive in-house training from the company they work for, whereas brokers gain knowledge from external courses and experience after working in the field.The insurance company is accountable for the products sold by their agents; the broker is responsible to the client – he should sell the product that best suits the customer’s needs.Insurance agents have in-depth knowledge of the products sold by their company; however, they gain some knowledge about the outcomes of the competitor companies for better sales and comparison. Brokers know and are supposed to learn a wide range of products since they are responsible for providing the best product available to the client.The commission of insurance agents is usually higher than the brokers. That is because they may receive performance bonuses based on their sales from the company they work for. Commission earned by brokers is comparatively lesser than the insurance agents.Insurance agents usually have stable compensation, whereas the income earned by brokers may vary month on month.Agents have a small customer base as they are limited to one company, while brokers usually have a higher customer base.Agents can provide personalized service to the customers as the customer base is small; however, brokers might not offer customized services due to the higher customer base.

Insurance Agent vs Broker Comparative Table

Final Thought

Insurance agents and brokers act as intermediaries between the insurance company and the customers. While both earn commissions from the sale of the products, major differences are highlighted in the article. Both have their targets/agendas to meet and earn a higher commission. However, it is their responsibility to provide good service and the best product that suits the customer’s needs.

This article is a guide to the Insurance Agent vs Insurance Broker. We discuss the difference between agent and broker, infographics, and a comparative table. You may also have a look at the following articles: –

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