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 Posted: Tue Jun 23, 2009 7:37 pm Post subject: Agent or Broker |
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What is the difference?
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| Posted: Tue Jun 23, 2009 10:58 pm Post subject: |
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Agent: An individual or firm authorized to act on behalf of another (called the principal), such as by executing a transaction or selling and servicing an insurance policy. The agent does not assume any financial risk in the transaction.
Broker: An individual or firm which acts as an intermediary between a buyer and seller, usually charging a commission. For securities and most other products, a license is required.
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GarySpicuzza
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| Posted: Wed Jun 24, 2009 10:11 am Post subject: |
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Can an independent agent be termed as a broker?
I guess he's someone who works for commission.
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guest
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| Posted: Mon Jun 29, 2009 12:25 am Post subject: |
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They easiest way for me to understand a "broker" is to see them as scalpers at a concert. They buy tickets in bulk at discounts and sell them individually for a profit (or in this case commission). However, as well as being legal (As long as licienced) the broker can influence the insurer to reduce their rates, especially if the broker has a large book of clients to negotiate with. There are definate advantages to going through a broker as they don't represent any 1 insurer, however thay may be acting under an agent (PPGA) in which case they will have to pay overriding commissions as well as charge the client for their own commission.
If the broker represents a client or group of clients then the agent represents the insurer and can directly underwrite insurance that is customized to you rather than selling ready made products. However the agent may be "captive" and give a narrow view of prices and products. Agents are usually better when it comes to service; captives will give good before claim service and independents after claim service (As independents have less of a tie to 1 individual insurer).
Please understand that these are pretty big generalizations and the truth is there is a lot of blurring nowadays. |
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darnardo1
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| Posted: Tue Jun 30, 2009 8:27 pm Post subject: |
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Ok so in life insurance and agent and broker are often used to mean the same thing. Anyone who sells insurance must be an agent whether your a broker or not.
A broker is often used to designate a agent that sells more then one carrier. Another use of broker is to designate a BGA (Brokerage general Agency) where the brokers clients are agents. A BGA normally does not sell to the public because there is a conflict of interest there.
In any event broker can be used both ways. It is not so clear cut in the insurance industry. |
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Marpol
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| Posted: Fri Jul 03, 2009 1:45 am Post subject: |
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| Tere is no difference when it comes to licensing. Same license. Broker represent multiple companies, agent represents only one. |
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donreyes
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| Posted: Fri Jul 03, 2009 9:14 am Post subject: |
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| Quote: | | agent represents only one. |
Well, I think it is not always an agent representing only one company. Independent agents are there who are in terms with more than one company. |
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simon
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