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Who Are Insurance Brokers?

Who Are Insurance Brokers?

News Date: October 10, 2018


Insurance brokers can be described as specialists in insurance and risk management who act on behalf of their clients by providing advice on insurance with the view to promoting the interests of their clients.


They are invariably willing to help their clients identify their (i.e. clients’) insurance needs and also help the client to decide on what to insure and where to insure.

According to the Canada Insurance Brokers Association (CIBA) ‘an insurance broker works for you (client) rather than an insurance company’.  Brokers use their professional knowledge and experience to help to properly assess insurance needs, shop for the best value in insurance coverage and help to pursue a claim in the event of one.

Insurance brokers generally work for the client in the insurance procurement process and act independently in relation to insurance companies. They help their clients in the choice of specific insurance policies that would meet their needs. Clients are presented with alternatives by way of choice of insurance companies and products.

Remunerations

The good news about engaging the services of a broker is that, their clients enjoy high level professional advice in insurance at no cost to them. Unlike the insurance agent who generally works for the insurer, insurance brokers work for the client and is paid brokerages (commissions) by the insurance companies without charging their clients. Due to their professional nature insurance brokers are licensed to work with several insurance companies in the placement of risk on behalf of their client.

How Brokers Work

Brokers per the nature of their work invite quotes from selected insurance companies and support clients in determining the appropriate limit of cover as well as the product from a range of products and also provide information on the claims payment profile of various insurers.

In some business jurisdictions, there are distinctions among brokers depending upon the types of specialized products they are licensed to sell – some are licensed to sell both life and non-life products, while some others may be limited to either of the two.

There are also reinsurance brokers who solicit, negotiate and sell reinsurance cessions and retrocessions on behalf of ceding insurance companies seeking coverage with reinsurers.

Benefits to the client

The engagement of a broker makes the insurance process more efficient for both the client and the insurer. Regardless of the legal role in which a broker is acting, the manner in which the broker approaches all such placements for their clients is as an intermediary – working on behalf of their clients to facilitate insurance contracts with insurers that have the ability and capacity to insure their risks.

Administratively, the broker replies to all correspondence between the insurer and the insured and ensures that renewals are done on time using a process-based approach which is increasingly used around the world.

The Importance of brokers in insurance practice

The importance of insurance in contemporary economies is unquestionable. Clearly, insurance serves a broader public interest far beyond its role in business matters and its protection of a large part of the country’s wealth cannot be under-estimated.

Apart from facilitating the placement and purchase of insurance, they complement the insurance placement process.

They are a critical channel of distribution as the client sometimes feels more at home dealing with them than dealing directly with insurance companies.

Insurance Brokers in Ghana have become very critical as they complement the efforts of not only the National Insurance Commission (NIC) but also the Ghana Insurers Association (GIA) to improve on the insurance industry’s total capacity on an oily wheel.

Some Challenges

A challenge among brokers has to do mainly with getting competitive rates for their clients. By so doing, there is the tendency to coerce insurers to unrealistically reduce rates or undercut premiums to levels that could simply pass for uneconomic! This is the reason the Insurance

Ownerships / Shareholding Nature

Many brokers in Ghana are owned or rather headed by experienced insurance practitioners who have retired from service in mainstream insurance practice. They are usually top executives whose expertise in insurance consultancy cannot be challenged. This is good for the health of the insurance industry; having professionals who ‘know what time it is’. One disadvantage here, however, is that some of them may prefer placing businesses at their former places of work or with their ‘connections’ within the industry without recourse to the efficiency and whether they can help in addressing the needs of the broker’s clients. Some brokers also without exhausting the local capacity place their businesses in overseas markets.

The Way Forward

Brokers have a responsibility to ensure that the right premiums are charged even though it is a known fact that they do not determine the pricing of insurance products.

There is the need to recognize the fact that they also have a responsibility towards insurers to ensure that all the parameters in rating a risk have been applied properly and at the same time balancing the equation to obtaining good terms for their clients.

The practice of placing businesses with companies they have some ties with may be putting some other companies at a disadvantage hence the need to transact business based on fair practice and the ability of the other insurers to deliver based on client specifications as well as risk profile.

Some local brokers are the channels through which external reinsurance placements are effected and this must be done in such a way to protect the local capacity before resorting to external business arrangements.

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General Questions


There are many insurance companies that offer Life insurance and many others that offer Non-life (General) Insurance in Ghana.You can go to any of these insurance companies and take out insurance.Once you contact them, their staff will advise you on what they offer and what is best suited to your insurance need.Click to see the list of GIA accredited Life Insurance Companies and Non-Life (General) Insurance Companies.Insurance – Some Basic Steps
  • Contact an insurance company, an insurance broker or an insurance agent
  • Discuss your insurance needs with them.
  • Think     about the options carefully and then choose the product(s) that meet(s) your needs
  • Supply truthful information for the completion of the insurance contract documents
  • Sign the insurance contractPay your premium
  • Receive an insurance cover for the risk(s) you have insured.
When should you take Insurance?
Once you have life with its possible unwanted outcomes, it is advisable to take an insurance against such possible unwanted outcomes. Also, as soon as you acquire a property it is advisable to choose an insurance to cover the risk of damage or loss to the property. Again anytime you have liability to another person for any damage you may cause the person, it is advisable to insure the liability. For liability insurance in the form of third party motor vehicle, commercial building under construction and commercial buildings you are required by law to take out insurance as an owner.

Protecting your life and property should be an important part of your financial plan. Insurance protects you from financial problems resulting from damage or loss either to yourself or to your property. It is therefore important that you insure your life and property against any unanticipated accidents, damages or loss. You can take insurance to cover any of the following listed below:
  • Death
  • Accident
  • Theft
  • Fire
  • Loss
  • Damage
  • Disability Health.

Broadly there are two kinds of insurance:Life Insurance which pays an insurance benefit when the person who is insured dies;Non-Life (General) insurance, which comes in many forms, including property, liability, disability, health and travel.
  • Property Insurance provides protection against property damage and the insured is indemnified (compensated) if such damage occurs.
  • Liability Insurance provides you with insurance protection if you are found to be liable for causing damage to someone’s health or property.
  • Disability Insurance provides protection should you lose your ability to work and earn income, and pays you income if you are unable to work.
  • Health Insurance covers certain medical expenses and prescription medications.
  • Travel Insurance provides protection against certain adverse occurence during travel such as illness or even missed flights.

Claims

  • The insured (policy holder)
  • The third party whose property has been damaged by our insured's vehicle
  • The injured victim
  • Administrators of a deceased estate
  • Parents/guardians in the case of minor.

Non-motor insurance comprise of several lines example public liability, professional indemnity, personal accident etc. Each non-motor insurance claim has its own specific claims procedure and conditions.Generally, when an accident occurs the insured should comply with the following :
  • Report to the police.
  • Contact your broker/insurer and fill the specific claim form.
  • Do not settle or negotiate to settle, admit or repudiate any claim without the consent of your broker/insurer.
  • Forward all relevant documentary evidence in respect of the loss.
  • Forward all claims, writs of summons or letters from third parties to your broker/insurer through insureghana.com.

1. If your vehicle was driven without your consent, order or permission.
2. When an unlicensed driver was driving
3. When the claim is statute barred i.e claims not submitted within the three (3) or six (6) years period.
4. Where there was a change of ownership on the vehicle without reference to us.
5. Using the vehicle whilst the driver was drunk.
6. Using the vehicle for unauthorized purposes.
MOTOR
A. Own damage
  • Report the loss to the insurer and fill the accident report form.
  • Attach a copy of the driver’s license.
  • Furnish the insurer with an estimate of the cost of repairs from either the insurer’s recommended garage or a repairer of your choice.
  • Provide pictures of the damaged vehicle, clearly showing the registration number of the accident vehicle.
  • Allow damaged vehicle to be inspected by the insurer’s surveyor before the commencement of repairs.
  • Police report would be required, depending on the circumstances leading to the loss.

B. Property damage claim
  • Letter of claim
  • Police Report
  • Furnish the insurer with an estimate of the cost of repairs from either the insurer’s recommended garage or a repairer of your choice.
  • Provide pictures of the damaged vehicle.
  • Provide driving license of the insured’s driver.
C. Injury cases·
  • Letter of claim
  • Police Report
  • Medical report
  • Original receipts of Medical Bill incurred (To justify the cost being claimed for)
  • Sworn Affidavit.
Two (2) passport-size pictures of the injured victim endorsed by the doctor who treated the victim.D. Deceased (death) cases
  • Letter of claim
  • Police Report
  • Death Certificate/Burial permit/Post-mortem report
  • Letters of Administration
  • Personal Particulars of the deceased
  • Sworn Affidavit
  • Endorsed passport size pictures of Administrators (two each).
In all cases, a discharge form which states the agreed quantum (amount) will be issued by the insurance company to the insured or claimant for execution and forwarded back to enable us process the cheque.

Under all insurance contracts, damages or losses incurred must be reported to the insurance company for the purpose of making a claim. In most cases a report must also be made to the police. Under a motor insurance for example, you must report any accident to the police as soon as it occurs to enable you to begin the processes for making insurance claims.Failure to report an accident can subject you to personal liability if the persons involved later find themselves to be injured and your insurance company denies the claims due to your failure to report the accident promptly.
This is what you are paid in the case of an accident or loss for which you have insured. Once you have entered into an insurance contract and paid your premium, you are entitled to compensation from the insurance company for any damage or loss suffered. The extent of compensation depends on the type of insurance.



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