Alexa Seleno

Understand how a wholesale insurance broker works

Juil 10, 2023
Un courtier grossiste en assurance signe un contrat

A wholesale insurance broker signs a contract

A broker insurance wholesaler is a person specializing in insurance, but more particularly in specific niches to find the most effective insurance offer for its customers. Indeed, it sometimes happens that a company or a person does not find an offer in relation to his expectations from traditional insurance companies. We can cite the example of expatriates looking for specific provident insurance, but also effective health insurance. The majority of insurance companies are not able to set up a specific contract, because they simply do not have appropriate management services. Moreover, they do not have a sufficiently developed distribution network and they do not wish to invest in structural costs, because the investment is not always profitable. In this case, wholesale insurance brokers negotiate with insurance companies to take care of the insurance of expatriates in “wholesale” condition. That is to say, not individually, but with a larger volume. In this way, professionals are able to negotiate prices, while setting up a satisfactory formula for their customers. Then, the offers obtained are presented by the distributors (insurance broker) and by the sales teams under the same conditions and at the same pricing obtained during the negotiation.

Wholesale insurance broker, an essential profession

As you can see, it is a particularly important job and yet little known to the general public. Its definition could be reduced to designing insurance products and then making them available to a network of distributors. But wholesale insurance brokers also act as an interface between brokers and insurance companies. As soon as insurance answers cannot be found on traditional contracts, the broker then takes over. A partnership is therefore set up in the form of a subscription mandate. In this way, competent insurers are able to send their offer. On a daily basis, the insurance broker works with a large clientele, mostly independent brokers or policyholders. Therefore, it scrupulously performs the same pooling work in comparison with insurance. Of course, the administration of the contracts will be directly managed by the wholesale insurance broker, as will their day-to-day management.

What are the benefits for the insured?

The wholesale insurance broker works in a particular scheme allowing the insured to have many advantages. First of all, efficient management, because the reimbursement and management of the contracts are carried out directly by the insurance broker. It is then for the insured to find an interlocutor working in a company with a human size. But financial security is also preserved, because the contracts are drawn up by the largest insurance companies. Although the latter do not intervene directly in the individual files, the guarantee remains indeed present. Finally, note that the insured benefits from a set of protections with reinforced regulations. This is explained by the legislation in place and insurance companies are obliged to meet a set of criteria in terms of financial security and commitment. In addition, insurance brokers have an obligation to provide precise information with a duty to advise. The accumulation of these rules ensures maximum protection for the insured.

Understand the nuance between a wholesale insurance broker and an underwriting agent

The wholesale insurance broker and the underwriting agent belong to the insurance value chain linking the provider and the insurance company. But the comparison stops there, because the underwriting agent replaces the insurance companies with reinforced powers over underwriting, pricing and claims settlement. For his part, the insurance broker has the status of broker and he will use the mandates of insurance companies to exercise his profession. Its objective will be to offer the best possible service to contributors with original solutions to satisfy the interests of its customers.

The magazine-insurance team of editors at your service! We look at all possible and imaginable information on insurance in order to help you sort it out. We strive to offer you quality articles to help you better understand the issues of this or that insurance.

Laisser un commentaire

Votre adresse e-mail ne sera pas publiée. Les champs obligatoires sont indiqués avec *