The Different Types Of Commercial Insurance Brokers

To the average man or woman on the street, the world by which commercial insurance brokers live and operate will be little more than a mystery. The field of insurance in general is still barely understood by laymen plus women, and with commercial insurance becoming one of its most specialised branches, this effect is felt several-fold.

Few-people seeking to take out this type of insurance is going to be aware, for instance, that there are several types of industrial insurance brokers on the market, each with its own specific ways to operate, strengths and limitations. At best, most of these men and women will be aware of the existence of the main, larger insurance companies, with the countless smaller operators being known to only a minuscule part of the overall demographic, mostly through study or word of mouth. Yet, on occasion, these types of alternative types of commercial insurance brokers may actually be more suited for what an individual or business is after than the more ‘mainstream’ alternatives; it is knowing that that the present article seeks to introduce prospective clients to the various types of commercial insurance companies available, in order that they may assess which will best suit their specific situation.

Insurer-Owned Brokers

Insurer-owned companies are perhaps the most widespread and prolific sub-section of the commercial insurance market, and many of the very most popular and best-known commercial insurance policy brokers fall under this category.
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Since the name indicates, these outfits are owned by large insurance companies, that typically dictate their standards plus practices. In certain countries, this model was considered the industry standard regarding commercial brokers for decades; it has, however , recently begun to lose ground, since the effectiveness of these types of outfits started to dwindle. Nowadays, many experts create a case for the model being outdated, and it is predicted that insurer-owned commercial insurance brokers will continue to drop market space in years to come.

Agent Networks

Broker networks comprise many small commercial insurance brokers, all of these share resources, assets and marketplace opportunities between them. In its ideal type, this is considered to be a beneficial model to get companies that choose to join one of those networks, with many of them advertising better commissions for individual brokers and service conditions for the companies as a whole; however , adhesion to this type of network remains uneven between countries.

Consolidated Brokers

Consolidated commercial insurance brokers result from one company assimilating, purchasing out or otherwise consolidating any number of smaller sized ones, in similar fashion to a corporate merger. At one point, these types of companies were the most common kind of commercial insurance brokers in certain marketplaces, with consolidations happening as frequently as once a week. The practice has significantly lost steam since then, however , mainly due to the fact that the exact benefits to be reaped from consolidation processes are not usually clear. This has caused many agents to sour on the practice, and far like insurer-owner brokers, it is thought that this type of brokerage firm may reduce even more ground in years to come.

Self-employed Brokers

The fourth and final type of brokerage firm are independent brokers, that is, brokers which are not related to either of the three types described earlier in this article. These tend to be smaller sized, often family or owner-run businesses, with smaller and more personalised customer bases, and frequently focused on more specialist or less explored areas of area. Customers resorting to an independent broker can expect a more personalised service, with a higher rate of face-to-face relationships and more time devoted to each case. This type of company is less common in the modern landscape than one of the previously listed ones, but there are still a few independent commercial insurance agents left, and they tend to attract a small yet loyal customer base.