What is Insurance Intermediaries, Insurance Agents, and Insurance Brokers

Introduction to Insurance Intermediaries

For a proper understanding of insurance contract, its simplicity, the financial involvement, and management, risk evaluation and reduction, proper interpretation of monetary terms to those who may not be monetarily acquainted, the Insurance intermediaries are the key to it.

They act as a facilitator in arranging insurance contractual relationships between the parties to insurance by bringing the customer in close contact with the insurance company.

We value the role intermediaries play as risk specialists, trusted advisors, and the range of skills and expertise they offer in the business of insurance.

Among others, they are adept at breaking down complex concepts, simplifying the industry’s most challenging concept.

In evaluating customers’ risk management solutions for individuals and businesses, the intermediaries act as a strong force that gives proper guidance to clients on the best decision to take to minimize risk.

Intermediaries Defined

An Insurance Intermediary is an insurance market middleman who introduces business or contractual relationships between the insured and the insurers to insurance companies.

They are being paid or remunerated by the insurers by payment of a commission. Also, individual agents, corporate agents including banks and
brokers –they intermediate between the
customer and the insurance company can be referred to as insurance intermediaries.

Types of Insurance middlemen or intermediaries

1. The insurance Agents.

2. The insurance Brokers.

Who is an insurance Agent?

An insurance agent is a person or an individual licensed as an insurance agent under the existing insurance legislation.

He has the legal function of bringing the insurer that is the principal into a contractual relationship with the insured {third party}.  

An insurance agent could be a person or organization that solicits, negotiates, or instigates insurance contracts on behalf of an insurer and can be independent or an employee of the insurer.

An insurance agent does not profess to be an expert in the insurance business and can hardly be sued for professional negligence.

An agent must have a certificate of proficiency issued by the charted insurance institute of Nigeria {CIIN}.

They may be classified as:

a. Part-time agents

b. Full-time agents

c. Cash agents

d. Credit agents

e. Own case agents

Duties of an agent to his principal:

1. Accountability

2. Honesty

3. Loyal

4. Obedience

5. Transparency.

Who is an insurance Broker?

An insurance broker is a person or company who profers to people on their insurance needs and negotiates insurance contractual relationships among the parties to a contract {insurer and the insured}  on their behalf in return for a fee or commission.

They are the limited liability companies registered under the insurance Degree or Act to transact insurance broking business and they are independent operators.

Their duties are to place risk, prepare policies, proper keeping of record cards, collect premiums on behalf of the insurers, collect claims for the insured, and maintain an elaborate system of account between the insured and himself on one part and his clients and himself on the other.

The insurance broker is a professional agent responsible for his acts of negligence, errors or

Roles of an Insurance Broker:

An insurance broker helps in risk evaluation, assessment, and management.

2. An insurance broker obtains agreement and understanding between insured and insurers in order to effect (or ‘place’) appropriate insurance cover pursuant to the instructions of its client.

3. An insurance broker gives appropriate advice and insurance solutions to clients with regard to risk and business management.

4. A broker also negotiates with the insurance companies on behalf of the insured or client.

5. They facilitate the sale of insurance even though they don’t work for insurance.


We have actually explained in detail that both the insurance intermediaries, the insurance agents, and the insurance brokers facilitate bringing the customers or client in a contractual relationship with the insurance companies.

They evaluate the investment proposal of the clients and guide them on the best decision to take so as to avoid being exposed to the risk of investing in a wrong hand or company.

They are paid a premium or commission for the service rendered.

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