Do You Need an Insurance Broker?

Insurance broker in Ghana

Do you need an insurance broker?

At the introductory stage, a Yes or a No answer will not suffice! Let me explain why it is so. This question has been an age-old quagmire within insurance circles. Many corporate institutions and individuals alike share the same reservation in this regard. Who is an insurance broker and why are they important?

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An insurance broker is a trained insurance intermediary who provides insurance advice, secures the appropriate insurance cover at a competitive price for the insuring public and also helps settle claims. Simply, a broker can be regarded as a specialized agent. Technically, the two are not the same. Unlike an agent, a broker can represent the interest of all insurance companies and can sell on their behalf. An agent, however, is polarized to serve the interest of only one insurance company at a time. Ordinarily a broker/agent represents the interest of his principal (organizations and individuals that patronize insurance). In the general law of contract, an agent acts on behalf of a principal. However, under the brokers’ arrangement, they can represent both the insurance company and the policy holder at different times in a transaction. Hence, act as an extension of an insurance company when collecting premiums from clients but represent clients when seeking cover and during claim negotiations and settlement.

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Some of the key points to note about insurance brokers are itemized herein;

Insurance Brokers are not Polarized

Your insurance broker is not tied to a specific insurance company or any specific insurance company’s products.  They therefore operate with much independence in their dealings with Insurance companies to arrive at the best deal for both parties.

Brokers are Experienced Insurance Practitioners

Brokers deal with a wide range of products and services and are qualified to recommend policies that best suit the needs of a client from a broader portfolio of options. Insurance contract wordings tend to be complex. Hence the importance of brokers to the individual to simplify them.

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Brokers charge no fee

Although strange it is the truth. Brokers receive commission from the insurance companies that they give businesses. The client does not pay a broker. Also, using a broker does not increase premium but may rather reduce your premium payment through the negotiation skills often times employed by the broker.

Brokers act with dispatch

Another advantage of using an independent insurance intermediary is that the client will be able to save money. Scouting for variety of insurance products on your own can come at a huge cost. The brokers allow the client to save money on their premiums by doing this at no cost to the client. Through their various information networks, they can reach several insurance companies in a short period.

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With this knowledge, buying an insurance policy should be easier. However, in the absence of an insurance broker, a client should rely on the insurance company to educate him/her about the intricacies of the insurance policy.


Mike Adomako, ACII.

Chartered Insurance Practitioner.

[email protected]