For the average man, the world of commercial insurance itself is a term too far-fetched; the chances that they will be familiar with the world of commercial insurance brokers is almost next to none. The field of insurance is barely understood by the laymen individual, and with commercial insurance being one of the most specialized branches of insurance, these terms continue to remain a mystery.
Only a few people, who have needed to approach commercial insurance brokers, will be aware of the types of commercial insurance brokers that exist in the financial world. That said, the world of insurance is a diverse one, and so are the types of brokers available on the commercial insurance market. They have their own specific ways to operate, have their own strengths and limitations. This article is to enlighten about the types of commercial brokers one can come across in the insurance market, and the types of services they offer according to their clients’ needs. Below are the 4 main types.
Insurer-owned companies are the most widespread and prolific sub-section of the commercial insurance market. A great number of the most popular and best-known commercial insurance brokers fall under this category. These brokers are owned by large insurance companies, who typically dictate their standards and practices.
Broker networks comprise of several small commercial insurance brokers, all of which share resources, assets and market opportunities between them. In its ideal form, model companies find it beneficial for their trade to choose and join one of these networks, with many of them advertising better commissions for individual brokers and service conditions for the companies as a whole.
Consolidated commercial insurance brokers are the type of brokers that are the result of company assimilating, buying out, or consolidating any number of smaller ones. These type of brokers used to be the most common type of commercial insurance brokers in certain markets, with consolidations happening as frequently as once a week. However, they seem to have lost their ground due to the fact that the exact benefits to be reaped from consolidation processes are not always clear.
The fourth and final type of commercial insurance brokers are the independent brokers, which are not associated with either of the three types described above. These tend to be smaller, often family or owner-run companies, with smaller and more personalized client bases, and frequently focused on more specialized or less explored areas of the field.