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Insurance brokerage: Everything you need to know in 2022

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An Insurance brokerage involves a company that has a contractual obligation with another company. When buying insurance, it’s smart to get quotes from

Insurance brokerage: Everything you need to know

An Insurance brokerage involves a company that has a contractual obligation with another company.

When buying insurance, it’s smart to get quotes from multiple insurers to find the best price. 

While almost anyone can compare rates online, in some cases it makes sense to have a professional Insurance brokerage company walk you through your options.

 

What is an insurance brokerage?

Let's talk about the definition of an insurance brokerage. This can actually be one of the most confusing things for an insurance buyer to understand.

So here's how it works. An insurance agent represents the insurance company and has a contractual obligation with that company.

Whether it be fireman's fund or travelers' or Liberty, they have that contractual obligation, which means they represent the company, not the insurance buyer.

They go out and acquire new clients, and the insurance is put with the insurance company, but in the end, ultimately, the insurance agent's allegiance is to the company first, not the insurance buyer.

Now, an insurance broker or an insurance brokerage is a little bit different. The insurance broker represents the insurance buyer.

They have access to all those companies.

Maybe some of the ones that I even mentioned, have access to them, but they don't have a contractual agreement to be their representative.

They have the opportunity to go shop for all of those companies and then place the insurance as they see fit.

They will often put a broker's fee. I've heard of a broker's fee on top of their regular premium to pay for them.

The insurance agent gets a commission, but the broker sometimes does not get a commission or they get a very small one.

So, the way they make money is by charging a broker's fee to the insurance buyer. In return, they represent the insurance buyer.

The bottom line is both the agent and the broker place insurance with insurance companies but the agent has a contractual obligation. and has been paid a full commission by the insurance company.

They represent the company.

The insurance company will often charge a fee because they don't have that contractual relationship with the company; they work directly for the insurance buyer.

And like any business, insurance agents and insurance brokerage both need business insurance themselves in order to operate in many locations.

Now you understand the real definition of an insurance brokerage with examples.

 

When to use an insurance brokerage.

The use of an insurance brokerage is not required for everyone. How you purchase insurance is a matter of personal preference.

However, insurance brokerage is often best suited for individuals with more complex insurance needs, such as a landlord or small company owner who has many policies.

You may benefit from working with an insurance brokerage if you:

  • Own several vehicles or properties.
  • You desire a comprehensive understanding of your policy's exclusions and restrictions.
  • if you need Business insurance.
  • Want to compare various insurance providers without investing time or effort.
  • Want a personal interaction with someone who is engaged in learning your history and insurance requirements.

 READ ALSO: What is an Insurance Binder?

The best insurance brokerage companies.

The largest Insurance Brokerages in the World provide many services besides insurance placement. Here are the largest brokerages listed - As per the AM Best. "Top 20 Global Broker." Accessed Jan. 7, 2021.

Note that the list includes insurance brokerages only.

1. Marsh & McLennan Cos. Inc.​
Revenue: $17 billion
Headquarters
1166 Avenue of the Americas
New York City, New York 10011
Tel.: (212) 345-5000
Website: https://www.mmc.com

2. Aon P.L.C.
Revenue: $11.0 billion
Headquarters
The Aon Centre
The Leadenhall Building
122 Leadenhall St.
London, England EC3V 4AN
Tel.: +44 (0)20 7623 5500
Fax: +44 (0)20 7621 1511
Website: http://www.aon.com

3. Willis Towers Watson P.L.C.
Revenue: $9.04 billion
Headquarters
The Willis Building
51 Lime St.
London EC3M 7DQ
Tel.: +44 (0) 203 124 6000
Website: https://www.willis.com

4. Arthur J. Gallagher
Revenue: $7 billion
Headquarters
2850 Golf Road
Rolling Meadows, IL 60008
Tel.: (630) 773-3800
Website: https://www.ajg.com

5. HUB International
Revenue: $2.4 billion
Headquaters
300 N. LaSalle St., 17th Floor
Chicago, IL Illinois 60654
Tel.: (800) 432-2558
Website: https://hubinternational.com

6. Brown & Brown, Inc.
Revenue: $2.39 billion
Headquarters
220 South Ridgewood Ave.
Daytona Beach, Florida 32115
Tel.:(386) 252-9601
Website: http://www.bbinsurance.com

7. Truist Insurance Holdings Inc.
Revenue: $2.27 billion
Headquarters
Truist Center, 214 N Tryon Street
Charlotte, NC
Tel.: 1-336-733-2000
Website: https://www.bbt.com

8. Lockton Inc.
Revenue: $1.88 billion
Headquarters
444 West 47th St., Suite 900
Kansas City, MO 64112
Tel.: (816) 960 9000
Website: https://lockton.com

9. Acrisure

Revenue: $1.88 billion
Headquarters
5664 Prairie Creek Dr. SE
Caledonia, MI 49316
Tel.: (616) 541-1294
Website: https://acrisure.com

10. USI Insurance Services L.L.C

Revenue: $1.87 billion
Headquarters
100 Summit Lake Drive, Suite 400
Valhalla, NY 10595
Tel. (914) 749-8500
Website: https://usi.com

 

Final Thoughts: Insurance brokerage.


Note that, the listed insurance brokerage listed here may not be near your state or area. But, you can also search for insurance brokerage near me and get the best companies that are located near your place.

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KIDIGITALI - Information Guides: Insurance brokerage: Everything you need to know in 2022
Insurance brokerage: Everything you need to know in 2022
An Insurance brokerage involves a company that has a contractual obligation with another company. When buying insurance, it’s smart to get quotes from
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