Insurance broker

Definition

An insurance broker is an independent intermediary who acts for the client rather than for the insurer: the broker assesses needs, obtains quotes from several insurers, places the cover and usually services the policy afterwards. In South Africa a broker operates as a financial services provider licensed under the FAIS Act, with key individuals and representatives who must meet fit-and-proper requirements. In the UK a broker is authorised by the FCA for insurance distribution and bound by ICOBS and Consumer Duty; across the EU the Insurance Distribution Directive applies. Brokers are distinct from tied agents, who represent one insurer, and from underwriting agencies, which carry delegated underwriting authority on behalf of insurers.

What you need to know

Being independent cuts both ways for a brokerage that talks to clients on WhatsApp.

The broker owns the advice. Under FAIS the record of advice, the disclosures and the client's instructions must be kept and retrievable; under Consumer Duty the FCA expects evidence that communications were understood. A recommendation typed into WhatsApp counts. The shared inbox guide for UK brokers shows how teams keep that evidence without exporting chats by hand.

The broker also owns the relationship across many insurers and many policies. A single client may hold motor and household cover with one insurer, funeral cover with another and a retirement annuity with a third. Renewals, debit-order failures and claims updates all converge on the broker, which is why a shared inbox and a consolidated client record matter more to brokers than to insurers.

Finally, in Southern and East Africa the broker is often the person who spots a missed premium first. Reaching the client on WhatsApp within days, not weeks, is the difference between a reinstated debit order and a lapsed policy, as described in the lapse-risk guide. Country specifics are on the country pages.

Concrete example

A Johannesburg brokerage with twelve representatives services short-term and long-term policies from six insurers. Clients used to message whichever representative they knew, on that person's own phone. After a complaint, the key individual could not produce the conversation. The firm moved to a single business number on the WhatsApp Business API, with every conversation attached to the client record and visible to the compliance officer.