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The insurance industry is vast and has multiple insurance products; one customer's needs are different from the others. To tackle the market many players are providing different types of services. Similarly, there are two types of players in the industry one is the Insurance Web Aggregator and the other one is Insurance Broker. Both of them required an IRDA license before start providing the services.
To understand their role and differences in the insurance market, let’s first understand how they help insurance companies and customers.
An insurance web aggregator works as an intermediary between the insurer and the customer. They maintain a website for the comparison of different insurance policy features such as price, claim settlement ratio, or other information about the insurance products. The big player in this industry is PolicyBazaar.
Mainly they collect all the information on different policies and upload it on a single online portal. Any customer who wants to compare the different plans can visit the website and can compare them easily without much hassle.
An Insurance Broker also works as a middleman between the insurance company and customers. They help customers personally to select an insurance policy that suits their needs and requirements best.
Also, they guide them about the smallest features of the policies which are beyond the understanding of the layman. An insurance broker must have a license to provide services to their clients and they can obtain it from IRDAI.
The following are the points that show the major differences between an insurance web aggregator and an insurance broker:
Premium for Companies
For web aggregators, the IRDA regulations state that a company can pay up to Rs. 50 thousand annually to present their policy on the website. For insurance brokers, companies pay around 2%-8% for selling a single policy. The rate depends on state regulations.
Premium for Customers
For purchasing an insurance policy from the web aggregator platform, the customer has to pay some charges which are comparatively lower. Also, they take 30% of the first-year premium for generating a lead for the business. From customers, insurance brokers can charge fees for insurance claims and for initiating changes.
On the web aggregator platform, there is no one to suggest to you the features and best policy as per your requirements. Although they have a representative who works as a broker and they take customers to the portal for purchasing an insurance policy.
Insurance brokers connect personally with clients and suggest to them some policies as per the requirements. They assist them throughout the process.
A Limited Liability Company can become a Web Aggregator, and it should not be included in any other business other than the web aggregator business. The company only has one certificate for insurance intermediation.
To become an Insurance Broker, the applicant first chooses the type of broker: Direct Broker, Re-insurance Broker, or Composite Broker. These insurance brokers have different type of criteria to become a broker and obtain a license.
An insurance web aggregator has an online platform, there is no one to guide you personally, and in case of any issue, the platform doesn’t take accountability because the client chooses the policy by themselves. But you can reach out to customer support with your problem.
An insurance broker connects personally with clients so they take complete accountability if any issue creates and help them to resolve it.
Purchasing an insurance policy from the web aggregator platform is easier because you can choose from multiple products on your own and do the payment online, which is quick and less time-consuming.
Selection of a policy from an insurance broker can take more time because the broker will show the policies manually as per your convenience and making payment to the broker is quick because now people are moving to the online payment system.
So, if you are looking for a personal recommendation before buying a policy then you must choose an insurance broker. And if you want to compare all the products by yourself before purchasing a policy then you must go for a web aggregator.
Before start providing the services of suggesting insurance policies to clients, the broker must have a license. At Registrationwala, we assist businesses in the complete process of obtaining an insurance broker license. This service includes:
So, connect with our experts to get the best advice on insurance broker licenses.
People also read: What's the Difference Between an Insurance Broker and an Agent?
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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