Insurance Brokerage Firms
Published November 26, 2011 | 
Insurance brokerage firms play a key role in business development of both life insurance and general insurance companies. On one hand, they act as intermediary between insurer and client, helping to assess the client’s business and risk profile, and accordingly suggesting appropriate coverage. On the other hand, they also act to convince the insurer to assume the risk involved in underwriting particular policies. Although insurance brokerage firms draw their salaries from insurers, a firm’s top priority is to see to the client’s interests. Moreover, firms do not charge any commission for services provided to clients. When a client makes damage claims, the firm interacts on behalf of the client with surveyors, photographers and structural engineers appointed by the insurer.
The insurance broker also relays data relating to the potential client’s business and risk profile to the technical division of the insurance company. The broker’s role may vary according to the size of the insurance company it serves. For big insurance companies, brokerage firms may operate in specialized areas, while elsewhere they may be required to look after the entire range of policies that an insurance company may have to offer.
Insurance brokerage firms are also supposed to manage knowledge and information flow relating to their clients and the markets in which they operate. Accordingly, they have to maintain detailed records. Not only that, but they also collate data from other sources and then analyze them to see the big picture. In addition, they identify new industry trends and developments on the basis of collated data and evaluate various insurance products on the market.
In many countries, in fact, insurers are already selling their products mainly through brokerage firms. In other words, brokers have emerged as the sole distributor of policies for the insurance companies in those countries. Nevertheless, this trend is yet to evolve into a global practice.
Life Insurance Companies – Does Yours Make the Grade?
Published November 26, 2011 |
Life insurance companies perform extensive checks into your personal history when you are applying for a policy. That is certainly no secret, the companies want to know about your family, your job, your health, your hobbies, the list goes on and on. Since insurance companies do this, why don’t consumers do this to their insurance companies? Knowing a lot about the company you do business with or, if you’re searching for a company to become insured with, the company that you’re considering doing business with, is very important. You have to look beyond the details of the policy and beyond the information that you read directly from the company itself.
Do your own research!
A life insurance policy is very important to you and your family, so it’s a good idea to look up other customer experiences, past lawsuits or problems the company has faced, etc. Judging only by the website or company brochure is not the most effective route to take. The company is not going to list anything negative whatsoever on any of their public information, simply because they are trying to draw you, the customer, in to doing business with them. A simple online search can provide a wealth of information to your fingertips. You will most likely find news articles, customer complaints, and rants on a blog or forum. While you can’t make your judgment call solely on this information, it may help influence your decision. Chances are there is another person in your exact situation that went to the company you’re interested in for a life insurance policy, and you can gauge their experience and determine if you feel yours might result in a similar situation.
Check with your state!
One thing you will definitely want to know is if the prospective company is legally licensed to provide insurance coverage in the state in which you reside. A lot of states will take company complaint information throughout the year and create a report that lists the insurance companies offered in the states and the number of complaints filed against them during that time period. Now, these complaints may be different from what you read about in an online search. The complaints you read about through the state can be anything from an insurance agent being rude, all the way to a major problem with a claim. While sifting through this information, keep in mind that you will need to differentiate an unhappy customer and a bad decision or mistake by the insurance company.
Insurance companies are rated on their financial strength and how stable they are as a company.
These ratings will help you determine if the company you are with or the company you might be opening a policy with is doing well in terms of assets and how much money they are operating with. In total, there are five companies that provide this particular type of ratings based on financial strength. They are: Moody’s Investors Service, Standard & Poor’s, A.M. Best, Fitch Ratings, and TheStreet.com Ratings, which used to be known as Weiss Ratings. The ratings these firms provide give the consumer (and the industry itself) insight into the possible future performances of the insurance companies. If the rating is high, the company has plenty of assets and money to continue doing strong business, and on the flip side, if the rating is low, the company may be closing or be sold in the future. A low rating may also mean the company has trouble paying claims, which is something I think everyone would want to stray away from. The ratings change throughout time and can sometimes fluctuate with bad decisions financially or news of company mergers or potential mergers, and also loss of money, for example if quarterly profits are significantly down.
Does your company have the industry “seal of approval?”
It is very important for your life insurance company to have the Insurance Marketplace Standards Association, or IMSA, designation. An insurance company that has this accreditation has proven itself by passing a critical review of the company ethics and business procedures. The IMSA review has a primary focus on customer service, sales, and marketing tactics. Companies have to apply for, or renew, their IMSA membership every three years in order to actually have the seal of approval. However, don’t look for this designation only during your search for a company; if you see this on your company information and stop looking right then and there, you may miss out on important information that you would probably like to know about before putting your trust in their hands.