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Agent vs Insurance Broker, What’s the Difference?

Liga Asuransi – You may have heard the terms ‘broker’ and ‘agent’ used frequently. Although both are professionals in the insurance industry, these two types of jobs have some differences. Both insurance brokers and insurance agents act as intermediaries between insurance buyers and insurance companies.

Both must have permission from the Financial Services Authority (OJK) to market insurance products. The main difference between an insurance broker and an insurance agent is who they represent.

An insurance broker acts on behalf of the insurance buyer (you) to several insurance companies, while an insurance agent may only represent one insurance company.

To clarify, here are the striking differences between insurance brokers and insurance agents

  • Insurance brokers represent your/client’s interests
  • Insurance agents represent the interests of insurance companies


Insurance Broker

Insurance brokers work to help insurance customers to obtain their full rights from the insurance company where the customer is listed as the policy holder. In other words, an insurance broker is a company that represents the interests of clients and is responsible for handling company risk management issues and creating insurance designs according to business risks.

Insurance brokers are not tied to any insurance company, so they have the freedom to offer various types of insurance according to customer needs. Apart from that, insurance brokers also play a role in the process of identifying business risks before providing business insurance solutions, and assist in submitting claims on behalf of customers.

The duties and responsibilities of an insurance broker are as follows.

  1. Providing risk consulting services for companies with capabilities and understanding that go beyond insurance knowledge.
  2. Insurance brokers have the ability to design, analyze and select competitive insurance products according to client needs.
  3. After identifying risks to the client company, the insurance broker provides various packages, facilitates the selection of insurance packages, and negotiates premium levels with the insurance company.
  4. Insurance brokers are affiliated with more than one leading insurance company, so they can provide clients with choices.
  5. Providing extra services that benefit the company such as risk management, insurance product recommendations according to the company’s risks and industry, and assisting in the insurance claims process.

Insurance brokers have a responsibility to explain in detail the risk management strategy. That way, business people can choose the type of insurance according to their needs, namely business and industrial risks. Insurance handled by insurance brokers is generally related to commercial businesses that have large values ​​such as property insurance, construction, cargo, infrastructure, affinity, energy, cyber, and employee health insurance.


Insurance agent

Insurance agents work on behalf of the insurance company they are agents for in making agreements with prospective customers. So, insurance agents are tasked with marketing products from one insurance company. Insurance agents must have permission and prior agreements with insurance companies before selling insurance products to prospective customers. Insurance companies need agents to market insurance products and explain to potential customers about the insurance products they sell.

The duties and responsibilities of an insurance agent are as follows.

  1. Have an agency agreement with an insurance company, either an independent agent or an agent employed by a particular company.
  2. Insurance agents are run by individuals with the stipulation that each insurance agent can only be an agent for one insurance company. This means an agent who markets products according to those issued by the company that oversees them.
  3. Insurance agents work on behalf of and in the interests of insurance companies.
  4. Insurance agents offer various products owned by insurance companies. Regardless of whether potential customers need the product or not.
  5. Insurance agents must be registered and licensed in order to sell insurance products. For life insurance, the agency registration and licensing provider is AAJI (Indonesian Life Insurance Association). For general or casualty insurance, the agency registration and licensing organizer is AAUI (Indonesian General Insurance Association).

Insurance agents work based on a professional interest to represent insurance companies. All actions of insurance agents related to insurance transactions are the responsibility of the insurance company they oversee.

Both insurance agents and insurance brokers can assist companies in purchasing insurance products. However, to get insurance products that suit the company’s business and industrial risk profile, business actors can work with insurance brokers. Especially for business people who want to have business insurance for the first time. Insurance brokers play a role in establishing communication with clients and designing solutions to client problems.

When shopping for insurance, there are several key things customers pay attention to, including cost, speed, convenience, security of personal data, and peace of mind that everything important is covered. Working with an insurance broker can help you get the insurance you need at the best price. Brokers deal with a wide range of products and services and have the necessary qualifications to recommend the policy that best suits your needs. Since most brokers work for small companies representing large insurance companies, the service is usually more personalized, which means better quality support.

When you work with an insurance broker, you can rest easy knowing that you are receiving honest and reliable service. Brokers provide full information about commission rates and the impact those rates have on your insurance premiums. 

In choosing the best insurance product, always use it insurance broker leading in Indonesia.

This article is presented by LIGASYS, a provider of Integrated Insurance Broking Systems for direct brokers and reinsurance brokers. LIGASYS is very helpful in simplifying the process and creating reports in accordance with regulations. Currently, LIGASYS has been used by several brokerage companies and reinsurance brokers.

For more complete information about LIGASYS contact Jamil General Manager at 08129616310, 081286300922 and email muhamad.jamil@ligasys.co.id 


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L&G Insurance Broker Registered by Otoritas Jasa Keuangan KEP-667/KM.10/2012
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L&G Insurance Broker Registered by OJK KEP-667/KM.10/2012
Proses hanya 24jam
Asuransi Marine Cargo Lebih Untung Dengan MOP
(Marine Open Policy)
Chat kami di WhatsApp untuk info lengkap!