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Agents vs. Brokers: Who To Choose?

When navigating the insurance landscape in Singapore, it’s important to understand the roles and differences between insurance agents, corporate agents, and brokers. Each plays a unique role in the insurance buying process, and knowing these differences can help you make more informed decisions. 

Definition and Roles: 

Insurance Agents in Singapore represent one or more insurance companies. They sell insurance products on behalf of these companies and help customers find suitable

coverage. Agents can either be captive (representing one insurer) or independent (representing multiple insurers). 

Key Characteristics: 

• Representation: Agents represent the insurance company and act as intermediaries between the insurer and the customer. 

• Binding Authority: Agents typically have the authority to bind coverage, meaning they can finalize and activate insurance policies. 

• Compensation: Agents earn commissions from the insurance companies based on the policies they sell 

Corporate Agents are similar to insurance agents but operate on a larger scale, often representing an insurance company as an entity rather than as individual agents. They may be involved in more complex insurance transactions and can offer a broader range of products through their corporate affiliations. 

Key Characteristics: 

• Representation: Like individual agents, corporate agents represent the insurance company and sell its products. 

• Scope: They often have access to a wider array of products and services due to their larger operational capacity. 

• Compensation: Corporate agents typically earn commissions and may have performance-based incentives linked to sales targets. 

Insurance Brokers represent the insurance buyer, not the insurance companies. They work independently to find the best insurance policies from multiple insurers, tailored to the client’s specific needs. 

Key Characteristics: 

• Representation: Brokers act in the best interest of the client, offering unbiased advice and a wider selection of insurance products from various companies. 

• No Binding Authority: Brokers cannot bind coverage directly. They facilitate the insurance process by submitting applications and negotiating terms on behalf of the client. 

• Compensation: Brokers earn commissions from the insurers but may also charge a fee for their services. Their compensation structure is typically transparent and agreed upon upfront. 

Choosing the Right Professional 

When to Choose an Agent: 

• If you prefer direct access to an insurance company and its specific products. 

• When you already know the exact policy you want from a particular insurer. 

When to Choose a Broker: 

• If you want a broad range of insurance options from different insurers. 

• When you need tailored advice and an unbiased opinion on the best policies for your needs. 

• If your insurance requirements are complex and need specialized coverage solutions. 

How to Verify an Insurance Intermediary’s License 

Before engaging with any insurance intermediary, it is crucial to verify their credentials and ensure they are licensed to operate. This not only protects you as a client but also guarantees that the intermediary adheres to the regulations in place. You can easily verify the license of an insurance intermediary through these platforms: 

Monetary Authority of Singapore (MAS) Public Search (Agents) – Access the MAS website to search for registered insurance agents and ensure their license is active. 

Monetary Authority of Singapore (MAS) Public Search (Brokers) – Access the MAS website to search for registered insurance brokers and ensure their license is active. 

ARCM Public Search tool (Corporate Agents) – Access the GIA website to search for registered corporate agents and ensure their license is active. 

Understanding these differences can significantly enhance your ability to choose the right insurance professional based on your specific needs and circumstances. Whether you opt for an agent, a corporate agent, or a broker, ensuring they are licensed and reputable is crucial for receiving reliable and effective service in the Singapore insurance market. 

By Margaret Ferté, Chief Executive Officer, Cléma Risk Solutions 

SOURCE: Cléma Risk Solutions