Insurance agents vs brokers vs insurers: What's the difference?
Finding the right way to buy insurance can be confusing, especially when you hear terms like insurer, agent, and broker used interchangeably. Each plays a distinct role in the insurance process, and understanding these differences is essential to making informed decisions about your cover.
In this guide, we will break down the key differences between insurance companies, agents and brokers. We’ll explain what insurance companies do, how agents operate, and why brokers work differently. You’ll also learn who sets the cost of insurance, the pros and cons of each option, and why many people choose to work with a broker for tailored advice and support.
What’s covered
- What is an insurance company?
- What is an insurance agent?
- What is an insurance broker?
- Insurance agent vs broker: 5 key differences
- Who sets the price of insurance?
- The benefits of working with Howden
- 7 Key takeaways
What is an insurance company?
An insurance company (also known as insurer or insurance provider) is a financial business that sells insurance policies to individuals or other businesses. Insurers evaluate an individual or business's risk and then charge a premium based on their level of risk. In exchange for premiums, they provide financial cover for certain costs if something goes wrong - like a car accident, theft, illness or property damage. Essentially, if you need to make a claim, insurance companies are responsible for paying out that claim.
Insurance companies create and underwrite policies, offering their own products and managing the terms of cover. Insurers can sell policies directly to customers or distribute through intermediaries such as insurance agents and insurance brokers.
Buying direct from an insurer gives you a straight relationship with the risk carrier and can be convenient for simpler needs. However, you are limited to that insurer’s products and pricing, which may not be the best fit for every situation.
What is an insurance agent?
An insurance agent represents one or more insurance companies, selling insurance on their behalf. Their primary duty is to the insurer(s) they represent, to whom they help attract new clients. There are two main types of insurance agents:
1. Captive agents
Captive agents work for a single insurance company and only sell that company’s products.
2. Independent agents
Independent agents work with multiple insurers and can offer a wider range of options to their clients.
Since agents work on behalf of one or multiple insurers, they can only offer policies from those providers. This limits your choices to a smaller range of products, which may not always suit your individual needs or offer the most competitive pricing available in the wider market.
What is an insurance broker?
An insurance broker works independently for you, the client. Acting as the intermediary between the client and a range of different insurance companies, insurance brokers search across a wider market, helping individuals and businesses find the right policy that fits their specific needs.
A good insurance broker adds value beyond price by tailoring cover, finding competitive deals and providing claims support. They can offer impartial advice and help you make an informed decision that serves your best interests.
Insurance agent vs broker: 5 key differences
While both help you find cover, the key difference between an insurance agent and a broker lies in who they represent. Let's take a look:
| Insurance agent | Insurance broker | |
| Who they represent | Insurer(s) | You, the client |
| Product range | Limited to affiliated insurers | Wide market access |
| Advice | May favour insurer's products | Impartial and tailored |
| Claims support | Often limited | Full support and advocacy |
| Pricing flexibility | Fixed quotes from insurers | Can negotiate and create competition |
Who sets the price of insurance?
The insurer sets the premium. Underwriters assess your risk profile and use rating factors to decide what you will pay for a specific policy. While insurance brokers do not set premiums, they can influence outcomes by presenting your risk clearly and negotiating with multiple insurers. Factors that influence premium costs include claims history, operating costs, commissions, and broader economic conditions.
Brokers help you compare quotes and coverage from several insurers, but the final price you accept is an insurer’s quote. However skilled broker can still improve your position by creating competition between insurers.
The benefits of working with Howden
At Howden, we believe insurance should feel personal, not complicated. That’s why our brokers work for you to find cover that truly fits your needs. With branches across the UK and a team of experts who take the time to understand your circumstances, we search the market for the right policy at the right price. From specialist products you won’t find on comparison sites to hands-on support when you need to make a claim, we’re here to make insurance simple and hassle-free.
Find out more here: What is an Insurance Broker? 8 benefits of using an insurance broker
Looking for an insurance broker near you? Visit our Branch Finder to find your local Howden Branch.
7 Key takeaways
-
Insurance companies (or insurance providers) create and underwrite insurance policies and insurance plans, while insurance underwriters determine the premium based on risk.
-
Insurance agents represent a specific insurance company, or multiple providers, meaning they can only sell insurance products from that particular company or a limited group of insurance providers.
-
Insurance brokers and insurance agents both act as intermediaries in the insurance industry, but their roles differ.
-
Brokers represent the client and work with multiple different companies, comparing different types of cover to find the best coverage for your needs.
-
By working independently, brokers take on an advisory role, allowing them to offer impartial advice that puts your interests first.
-
Purchasing insurance through a broker means access to a wider market, more tailored plans, and assistance with claims.
-
Whether you’re an individual or a small business, understanding these key differences can help you choose the best policy, avoid gaps in coverage, and save money.
Insurance agents vs brokers vs insurers: FAQs
Is a broker better than an agent?
It depends on your preferences. Insurance brokers work independently and can compare plans from multiple insurance providers, giving you more choice and flexibility. Insurance agents, on the other hand, usually represent a single provider or multiple insurers, so their services are limited to that company’s insurance products. If you want tailored cover and the ability to choose from a wider range of insurance providers, a broker might be the better option. However, if you prefer a direct relationship with a single agent and provider, an agent could suit you.
What is the difference between an insurance agent and an insurance broker?
The main difference lies in who they represent. Insurance agents typically work for one or several insurers. They have contracts with one or several insurers and can only offer what those companies provide. Insurance brokers, however, are independent professionals who work on behalf of potential clients. They can compare coverage across multiple insurance providers and insurance carriers, delivering a more personalised service and finding the best cover for your business or personal needs.
What's the difference between an insurance broker and an insurer?
An insurance broker works for you, helping compare multiple insurers to find the right policy and coverage. An insurer, on the other hand, is the company that underwrites the risk and pays claims.
Brokers act as advisers, offering choice and guidance, while insurers provide the actual product.
In short, brokers represent your interests, while insurers represent their own.
Is it legal to use an insurance broker?
Yes, it’s completely legal, and common, in the insurance world. In the UK, insurance brokers are regulated by the Financial Conduct Authority (FCA), which sets strict rules to ensure professionalism, transparency, and customer protection. This regulation helps maintain trust and accountability across the industry.
If you want to check a broker’s status, you can search for them on the FCA register. It confirms whether they’re authorised and shows details of their permissions. It’s always worth checking before you buy a policy, especially if you’re dealing with a new or unfamiliar broker.