An insurance broker works with several insurers to request, sell, or negotiate insurance policies or services on behalf of their customers. Insurance brokers act as a bridge between insurance companies and customers. Every insurance broker is a complete package of the following aspects:
- The specialty of insurance brokers is risk and insurance management.
- Brokers act on the client’s behalf and offer advice in the client’s interests.
- Insurance brokers help consumers identify a business or individual threats/risks and advice on how to handle them.
- Technical advice is also given by the brokers to make claims if necessary.
- Insurance brokers are aware of coverage, exclusions, and terms & conditions of policies; therefore they help in choosing the appropriate policy.
- Brokers aid in arranging & placing cover with the insurer.
Forecast Analysis of the Market
The global insurance brokerage market is estimated to enhance in the forthcoming years due to the digitization of insurance broker services at a large scale. For instance, in June 2021, Wefox, a digital insurance startup, declared that it had raised USD650 million from investors in an ‘insurtech’ company and this is a record-breaking achievement. Wefox’s tactic to provide digital tools assures automated, streamlined, and labor-intensive processes for the agents. Apart from this, as per a report prepared by insurtech, digital channels are gaining popularity due to risks and the onset of natural disasters coupled with social distancing & lockdown norms during the COVID-19 pandemic. Also, the report mentioned that 87% of insurers said that they will invest in digital platforms and 32% said that digital channels are efficient in sales as they lack customized advice capabilities.
Furthermore, brokers and insurance agents are heavily investing in digital channels to offer online assistance, margins, and sales. Also, the agents and brokers are provided with adequate knowledge of digital platforms through website interactions, digital distribution channels, and insurance websites. The incorporation of technology in insurance companies and brokerages is predicted to drive the global market in the coming years significantly. Apart from this, the global insurance brokerage market is speculated to augment at a CAGR of 5.4% during the 2021-2028 timeframe. Furthermore, the North American market is projected to hold a dominant share as governments cover insurance for all residents living in the region.
Recent Developments in the Market
The leading players of the global insurance brokerage are as follows:
- USI Insurance Services L.L.CAon plc
- Acrisure LLC
- Brown & Brown Inc.
- HUB International Limited
- Lockton companies
- Truist Insurance Holdings
- Marsh & McLennan Companies Inc.
- Willis Towers Watson
These prominent participants of the market are predicted to enhance rapidly due to various strategies applied by them such as novel product launches, mergers of promising companies, collaborations, and research activities. For instance, in June 2021, Ratehub Inc., a mortgage & finance company, declared the launch of P&C, a property & casualty insurance brokerage called – RH Insurance. The company aims to launch the biggest financial product comparison online platform in Canada. Furthermore, in September 2020, Mahindra Finance, a financial service company, was set to enter the business of digital insurance broking services by launching a service portal called PayBima. Moreover, in June 2020, BSE EBIX Insurance Broking, a collaboration of EBIX Fincorp Exchange and BSE, introduced the beta launch health insurance products. The company has partnered with Religare Health Insurance and is offering health insurance to participants.
Covid-19 Impact on the Market
The global insurance brokerage market is negatively affected during the Covid-19 pandemic due to the shutdown of insurance brokerage companies across the developing nations. Also, various brokerage companies are withdrawing their funds from the companies to meet their daily needs during the pandemic. Moreover, the shutdown of businesses, organizations, offices, and much more during lockdown to curb the spread of coronavirus infection is anticipated to decline the market growth. However, digitization of brokerage services is the key to propel market growth during the pandemic.
Future Scope of the Market
Sometimes people prefer to purchase insurances directly from the companies and do not consult brokers. This factor is likely to hamper market growth in the coming years. However, government initiatives to promote and give insurances to all the residents of the nation are estimated to create opportunities for the market in the forthcoming years. Moreover, the digitization of brokerage services is another factor that is expected to propel the market growth in the future.