Through disclosure at the contract level, the insurance claimant is aware of the ability in which the insurance intermediary/distributor operates. Many insurance intermediaries offer the client (particularly in the industry) the choice to work either on the basis of commissions or on a fee basis. When considering the choice between the two, both the intermediary and the client must consider a number of factors in their dialogue. For example: commissions can only be paid if there is a contract. In a pricing system, customers should consider whether they can afford to pay a fee based on the time spent on the claim. The commission system meets future service needs. The transparent coexistence of different remuneration systems is the best guarantee for competitive and dynamic markets. Insurance brokers help clients analyze their needs and choose their insurance by offering alternatives for insurers and products. What differentiates them from the representative, in most cases, is the absence of a contractual relationship with an insurer or several insurers to make exclusive transactions.
It can be more than an intermediary involved in the chain of intermediation activity for a risk or a customer. In addition, there are reinsurance intermediaries who solicit, negotiate, negotiate and place reinsurance assignments and retrocessions in the name of divestment of insurers seeking coverage from reinsurers. Reinsurers may also participate in the return of certain parts of its risk by a reinsurer. Insurance agents are generally intermediaries who conduct transactions on behalf of one or more insurance companies with which they have an “agreement” or “mandate” of an agency. The insurance agent relationship can take different forms (several, exclusive,…). Thanks to intermediaries, the European insurance market can export its capabilities and know-how around the world. Intermediaries make insurance more accessible to consumers and small businesses. Through the intermediary, more people and businesses are well insured. BIBA has published high-level principles agreed by the European Federation of Insurance Intermediaries (BIPAR) for brokers who take risks from several insurers. These principles were developed following the European Commission`s study on the business insurance sector. The Commission`s final report raises serious concerns about the inclusion of co-insurance operations. In particular, the Commission expressed concern that the next market would not have the opportunity to compete with the dempremium.
Once the client`s risks are identified and insurance needs are identified, there are a number of factors that determine the recommendation that intermediaries make to their clients when advising them in choosing an insurance or insurer. Overall, the intermediation sector in the EU is divided into three major sub-sectors.