The Manila Times

Role of insurance brokers

HERMINIA “MING” JACINTO äJacintoA8

OUR lives have changed over the past 14 months, counting from the first lockdown in 2020. We had to learn numerous new ways of conducting our daily activities. Children had their classes at home as their parents were also working from home. The internet providers and sellers of laptops, cellphones and other devices experienced a sudden surge in sales — more than the average sales for the last five years. Online sales were the way to go. Anything and everything could be bought online, including insurance.

Insurance companies had to set up or improve its websites, databases, portals and everything that has to do with selling its products online. Traditional selling practices continued but were greatly hampered by the lockdowns and imposition of strict safety protocols. Agents and other intermediaries had to reinvent themselves to cope with the new way of selling. We have a very active and robust agency force both in the life and nonlife sectors. They represent the various insurance companies and have to pass the qualifying examinations given by the Insurance Commission. These intermediaries are either the insurance agents or insurance brokers as defined in Title 1, Chapter 4 of Republic Act 10607 otherwise known as the Insurance Code of the Philippines.

Insurance agents are well-known to most of us. They have been around for a very long time and have been servicing our insurance needs. Many have become friends and confidantes of their clients. But who are the insurance brokers? Section 310 of the Insurance Code defines an insurance broker as someone who “acts or aids in any manner in soliciting, negotiating or procuring the making of an insurance contract or in placing risk or taking out insurance, on behalf of an insured other than himself.”

This differentiates them from the insurance agent who acts on behalf of the insurance companies they represent. Insurance brokers have a direct and close relationship with their clients as they prepare their insurance programs. They have access to various data provided by the vast experience with various types of risks and clients. There are about 60 insurance brokers in the country based on the statistics of the Insurance Commission as of end 2019. Many of them have foreign partners or associates who can readily provide technical support and other services including reinsurance.

Recently, the non-life insurance industry had to deal with the raging issue of whether to have tariffs or not on certain lines of insurance, like property, motor and bonds. Should there be a tariff? Should it be mandated? By the Insurance Commission or PIRA, the industry association? As of the time of writing, we do not know yet the result of the referendum which was conducted among its members. It is in endeavors like this where insurance brokers can play a significant role of working hand in hand with the insurance companies. They have the technical knowhow and they have firsthand knowledge of the risks being rated.

More than pricing, insurance brokers can offer a lot more services to their clients since they have a team of experts in-house or have ready access to them.

Brokers cannot be complacent with their longtime clients. They should regularly review the policies and suggest improvements in various aspects of the coverage. The pandemic has provided the urgent need for that technical review which might be missed as the competition for rates becomes the main concern. Competition should not be in the pricing alone. Brokers can do a lot to be valuable to their clients. Efficient claims settlement can be one broker’s claim to fame. There are new issues surfaced claims are being filed on business interruption covers resulting from lockdowns. How did they handle this sticky problem? Why not sponsor a webinar to share expertise and findings on these issues?

Brokers, roll up your sleeves! This is an opportunity to shine and provide advice and expertise on difficult and controversial issues in addition to taking care of clients’ needs and requirements.

You are “frontliners” of the insurance industry.

Opinion

en-ph

2021-05-10T07:00:00.0000000Z

2021-05-10T07:00:00.0000000Z

https://digitaledition.manilatimes.net/article/281681142754081

The Manila Times