• Insurance agent vs insurance broker: what is the difference?

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    By Siva | 18 May 2022

    With the advancement of technology, insurance sale has taken a new form as more and more young professionals prefer buying policies online. Even in this day where internet access is just a click away in our cellphones, the role of insurance agents and insurance brokers continue to be relevant as many people still require help with choosing their policies. The key role of a insurance salesperson lies in helping their with their requirements and finding suitable insurance covers that meets their requirements.

    When it comes to insurance sale, the terms ‘agents’ and ‘brokers’ are often used interchangeably by customers. However, these industry terms have specific means and the role of an agent is different from that of a broker. Among the similarities between agents and brokers, it is worth noting that both sell insurance policies to customers and earn commissions based on their overall sale.

    Difference between insurance agents and brokers

    The following table highlights the key attributes and the difference in the roles of agents and brokers:

    Features Agents Brokers
    Representation Insurance agents represent only one company, and they sell products in the company’s lineup. In addition to selling policies, agents also focus on improving the brand image of the company they represent. Brokers typically sell insurance products belonging to different companies in the market. They do not have any allegiance to a particular company and sell products based on the requirements of customers.
    Training Since insurance agents represent a particular company, they receive in-house training from their respective companies on various products offered. Brokers are not trained by any specific companies since they sell a wide range of products. There are external courses that can be taken by brokers before they start selling insurance products.
    Licensing Agents who have received training must obtain a license as per the regulations put forth by the Insurance Regulatory and Authority Development of India (IRDAI). Brokers must be licensed by the IRDAI in order to operate in the market. They are expected to meet a certain level of business regulations before they can get the broker license.
    Accountability An insurance company is accountable for the actions of its agents. IRDAI has the right to penalise an insurance company for any wrongdoings of its insurance agents. Brokers have bigger accountability as they are not backed by any specific company. Brokers are bound to offer multiple products to their clients and disclose the prices of these products. Brokers can get sued for any misleading information they provide to their clients.
    Knowledge Insurance agents have in-depth knowledge in the products offered by their own companies. Although they are not required to know about all products in the market, they may have some knowledge about their competitor’s products just for the sake of comparison. Insurance brokers are required to have knowledge about multiple products in the market. They are bound to explain various products that seem best fit for the requirements of their clients. Also, they are accountable for the information they provide to customers. Hence, extensive knowledge about multiple products is a mandatory requirement for brokers.
    Compensation The commissions offered to agents are typically higher than that of brokers. The income earned by agents are relatively stable as they provide service under the wing of only one company. Companies may pay extra compensation based on the performance of agents. Brokers sell multiple products, and commissions are based on the sale they make. Brokers must advise their clients about the products they sell and charge a fee from the companies. Based on the type of policies sold, brokers could experience variations in their income.
    Personalised service Agents may be able to provide personalised service to their clients since they have a limited customer base for the products they sell. Moreover, agents represent the image of a company and they act accordingly to ensure personalised service. Brokers offer good service for their clients with the help of their professional knowledge. However, the wide customer base they have might prevent them from offering personalised service to their clients.
    Volume of business For insurance agents, the volume of business is limited since they deal with the products of only one company. Brokers, on the other hand, have access to multiple insurance products in the market, and their volume of business is often much higher.


    When you are having trouble with picking the right insurance product, you can seek the help of an agent or a broker to guide you. As per the IRDAI regulations, insurance agents and brokers have a moral responsibility to not misrepresent anything to their clients. When agents and brokers fail to adhere to their duties, it results in legal disputes with customers. It is true that agents and brokers have their own agenda with regard to meeting deadlines and achieving targets. However, their primary focus must be on helping customers access the right insurance products.

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