Monthly Archives: June 2013

Insurance Agent vs Insurance Broker – What is the difference?

Back when I was working in a brokerage, I was constantly hearing people refer to us as Agents and / or Brokers.  It occurred to me that many do not realize that there is actually a difference between the two.  Do you know how to tell them apart?

Well the first thing to realize is that there are only minor differences between the two.  Both sell various types of insurance to the public.  The real difference is who they are selling for.

An Agent works on behalf of the insurance company by selling only one product.  If you have seen insurance company advertising from other provinces, you may have heard of State Farm.  In a State Farm office, they can only sell State Farm Products thus making them State Farm Agents.  These are also referred to as Direct Writers in the insurance world.

A Broker works on behalf of the client to ensure that they are able to find the best product that fits the clients’ needs.   In many insurance offices across Manitoba, you will find that the office represents many different types of companies.  This is to ensure they can find a product that best meets their clients’ needs.

In these offices, they tend to be independently owned and operated by individuals – not insurance companies.  It is important to know this so you understand why brokers are working for you.  While they always keep the insurance companies needs in mind, at the end of the day it is their clients who they really work for.

By using an Independent Insurance Broker, you know that you are getting trusted advice and that your insurance policy is being priced with more than one company to ensure you are getting the best coverage available to you.

Thinking About the Industry

I will be brutally honest – most people involved in the insurance industry did not grow up thinking that, when they grew up, they wanted to be an insurance broker.  Myself?  I was going to be a race car driver, which definitely did not pan out.  (Refer to the fact that I now drive a toaster looking car – definitely not built for speed)   The only exception to this observation seems to be people who knew that when they were older, they wanted to take over the family business which happened to be an Insurance Office.

But why is this?  Insurance is a fundamental need of EVERYTHING!!  It makes me chuckle to think how something this crucial is never really talked about when kids are growing up.  Now you might be thinking, “What do you mean be fundamental?  Isn’t insurance just a bunch of boring people pushing paper in an office somewhere”?

Well I can’t argue that it is primarily an office job but aren’t most jobs based somewhat in an office? The big difference with insurance is that it is a job where we provide something that everyone needs.  Think about it.  Movies can’t be made without insurance on the actors and sets.  Homes cannot be purchased and mortgaged  without insurance to protect them in the event of a fire.  Cars cannot be on the road without protection on them.

Insurance is an industry that is recession proof, depression proof, and mundane proof.  The world is not able to operate without insurance.  It is this simple fact that makes is not only a stable profession but also one that is constantly evolving to meet the needs of the public.  No two individuals, claims or policies are ever the same.

Know I don’t know about you, but that sounds like a pretty interesting industry to me…