• General
• Life
  
• Personal Accident
  
• Health
  
• Motor
  
• Property
  
• Liabilities
  

• What is the logic of insurance?
• What is the difference between Agent & a Broker?
• What are the pre-requisites for becoming Insurance Broker?
• What are Insurance Brokerage houses?
• What is reinsurance?
• What is Underwriting?
  
  
  

It is a system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. A loss is paid out of the premiums collected from the insuring public and the Insurance Companies act as trustees to the amount collected.

Agent is the representative of Insurance Company whereas broker is the representative of the consumer or policy holder. An agent is licensed to work for only one company, whereas a broker can deal with more than one company.

IRDA would shortly be releasing the gazette for intermediaries like agents, brokers, surveyors, etc. The same will be available on the web site for your down loading on availability.

Worldover insurance brokerage houses are large, sometimes even larger than the insurance companies themselves. They provide reinsurance to insurance companies. In many markets, brokers provide non-life insurance as well as group life and group mortgage insurance.

In countries like Japan, the broker is not empowered to conclude contracts, accept representations, and to receive insurance premiums. In such cases minimum capital requirements and solvency margins are not needed.

In general an insurance broker would provide the following services:

• Pre sales and after sales service to the customers.

• Provisions of relevant information to the underwriters to assess the risk and decide the premium.

• Design covers that meet the client requirements.

• Recommend risk improvement and loss minimisation measures

• Provide risk management and insurance education

• Collection of Premiums

The very fundamental principle of spreading of the risk is actually practised by the insurance companies by reinsuring the risks that they have insured. Simply speaking, it is insurance of insurers.

Underwriting of a risk involves consideration of material facts on the basis of which a decision will be taken whether to accept the risk and if so at what rate of premium.