Understand the Insurance Intermediaries, Know Their Roles and Types

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Understand the Insurance Intermediaries, Know Their Roles and Types

The insurance industry is one of the major industries in India. The insurance market in India is expected to reach US$ 222 billion by 2026. The insurance intermediaries play an essential role in accelerating this growth. There are different types of insurance intermediaries in India and each intermediary plays a distinct and crucial role. Because of them, the individuals are able to purchase insurance policies of their choice from the insurance companies. In this blog post, we will explain what insurance intermediaries are. 

Who is an Insurance Intermediary?

An insurance intermediary in India is an individual or business that acts as a link between insurers and consumers. They are involved in the entire lifecycle of an insurance product, from the point of sale through policy servicing to claim servicing.

An insurance intermediary can be used to refer to an insurance agent, corporate agent or insurance broker. Surveyors and Third party Administrators are also insurance intermediaries. However, they are not involved in the procurement of business.

Types of Insurance Intermediaries 

Different types of insurance intermediaries involved in the business procurement have been described below:

Insurance Agent

Anyone licensed by the Insurance Regulatory and Development Authority of India (IRDAI) to solicit and procure insurance business, including business pertaining to the continuation, renewal, or revival of insurance policies, is considered an agent. 

An agent is a person who acts as a middleman on behalf of an insurance provider. An insurance agent licensed to work as an agent for both a general insurer and a life insurer is known as a composite insurance agent. 

Corporate Agent

An organization or individual that solicits and provides insurance services for a particular type of life, general, or health insurance is known as a corporate agent. They often work in a certain insurance field and may represent one or more insurers. For instance, a car dealer might provide auto insurance, while a travel agency would provide travel insurance. 

If you are confused between an insurance agent and a corporate agent, you must know that a corporate agent can sell policies from multiple insurers, while an insurance agent can only represent one insurer.

Insurance Broker

An insurance broker is an individual or entity registered with IRDAI and authorized to solicit and arrange insurance and/or re-insurance for their clients with insurers and/or reinsurers located in India/overseas and/or provides claims consultancy, risk management services or other services authorized under Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 2018.

There are five categories of Insurance Brokers in India i.e., Direct Broker (Life), Direct Broker (General), Direct Broker (Life & General), Reinsurance Broker and Composite Broker.

The Role of Insurance Intermediaries in India

Intermediaries have many roles to play in the insurance market. These players come with broad knowledge of the insurance marketplace including products, prices, and an acute sense of the insurance purchaser’s needs. 

The following are the roles and responsibilities of IRDAI insurance intermediaries in India:

• Insurance brokers help the clients in choosing the right insurance policy by guiding them regarding all the insurers, products and insurance terms. 

• To find the best coverage for their clients, insurance brokers work with multiple insurance companies.

• Information on placements, premiums, and claims experience is gathered and assessed by IRDAI insurance  intermediaries. An intermediary is in a good position to support and encourage the creation of novel insurance products and to open up markets where none previously existed when this knowledge is coupled with an awareness of the needs of its clients.

• They can provide advice and guidance to customers, such as risk management, insurance policy options, and financial planning.

• Intermediaries help to reduce search costs for insurance buyers who are looking for the right coverage and right insurer for their risks.

• They also help to reduce sales and marketing expenses for insurance companies in search of insurance buyers.

Conclusion

There are various types of insurance intermediaries in the insurance industry. They propel the insurance industry’s growth by playing distinctive and essential roles for both insurers and policyholders. 

If you want to open an insurance company in India, then it is mandatory for you to obtain an IRDAI license from the Insurance Regulatory and Development Authority of India (IRDAI). For assistance in securing this license, connect with our experts at Registrationwala.

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