What Is an Insurance Broker?

CCW Global is an insurance broker.

That seems, simple enough, doesn’t it? Just another way to purchase insurance.

If you’re on this website you’re either interested in purchasing insurance, or you already have insurance and want to know more about what CCW Global does.

However, with all the confusion in the world today, and the misinformation being provided by unscrupulous sources, there is no such thing as too much disclosure. As a part of this it is important to understand that there are different types of insurance company, and they don’t all operate in the same way.

So, with that in mind, here is everything you ever wanted to know about insurance brokers in Hong Kong.

What Is an Insurance Broker in Hong Kong?

The first thing to understand when it comes to insurance brokers in Hong Kong is that the term “broker” is actually a legal definition.

Under the Insurance Companies Ordinance (Cap. 41)(“IO”) a “broker” can mean either a licensed insurance broker company, or a licensed technical representative (broker):

Licensed insurance broker company means a company which is granted a license by the Insurance Authority (“IA”) under section 64ZA of the IO to carry on regulated activities in one or more lines of business, and to perform the act of negotiating or arranging an insurance contract as an agent of any policy holder or potential policy holder.

Licensed technical representative (broker) means an individual who is granted a license by the IA under section 64ZC of the IO to carry on regulated activities in one or more lines of business, as an agent of any licensed insurance broker company.

In Hong Kong a business or person must be properly licensed in order to claim to be an insurance broker. If a person is granted a license then they are the nominated representative of the company, and can be then be considered to be a broker.

The fact that insurance brokers in Hong Kong are licensed to conduct their business is extremely important as this ensures that only responsible and trustworthy entities are giving advice on insurance.

CCW Global’s Insurance Authority License number for our Insurance Broker Company License is No.: FB1643. We encourage you to review and check our accreditation on the Insurance Authority Register of Insurance Intermediaries. Further to this, all our brokers are fully licensed and comply strictly with local laws and regulations.

"… Regulated activities in one or more lines of business"

Insurance is a regulated industry. That means that there is oversight and accountability – insurance brokers must submit audited financial accounts every year, for example.

In Hong Kong, under the Insurance Authority Definition when it comes to the regulated activities these are:

the act of negotiating or arranging a contract of insurance. the act of inviting or inducing, or attempting to invite or induce, a person to enter into a contract of insurance. the act of inviting or inducing, or attempting to invite or induce, a person to make a material decision.

This means that anyone giving advice on or about insurance, or helping you to make a decision about your insurance, should be properly licensed. This is for the good of both the customer and the industry, and laypeople will not have the extensive understanding and expertise of a full time professional who has passed qualifying exams.

Holding a license and having the ability to advise on insurance allows an individual or company to talk to insurance companies and receive terms of business, which is important for reasons we will discuss later.

"… Contract as an agent of any policy holder"

The most important part of the definition of an insurance broker in Hong Kong is the statement that dictates a broker “contract as an agent of any policy holder.”

While there are many different types of insurance company in Hong Kong, and even different types of intermediary, the primary difference is in how the client or policyholder is represented. In the case of insurance brokers, the broker is contracted directly as an agent of the policyholder.

Again, the insurance broker represents the person purchasing insurance, and not the company or entity which is providing it. This is a hugely important point that often goes overlooked by many people looking to obtain insurance. Unlike agents, who are contracted by, and represent, the insurance underwriters, the broker holds a contract of service with the policyholder.

This means that the insurance broker represents the policyholder not the insurance company.

As such, a broker is legally obligated to act in the best interests of their client. If you’re from the USA you’re probably already familiar with this concept in financial services as it is very akin to the operations of a Fiduciary.

If you’re an existing CCW Global customer you will have signed and returned a Client Agreement as part of your insurance onboarding and enrollment process. This document outlines CCW Global’s responsibilities towards you as a customer and what rights you can expect after your insurance purchase when dealing with our company. The outcome of this document is that you are a client of CCW Global, and not a client of the insurance underwriter (even though it is the insurance underwriter providing your insurance).

More than one insurance underwriter

With the understanding that an insurance broker works on behalf of their client, and not the insurance underwriters, this enables a Broker like CCW Global to seek terms of business from many different insurance underwriters for the licenses they hold.

This is a key distinction of a broker versus other Insurance Agents in Hong Kong as an Agent is directly contracted with, and works for a single insurance company.

When you seek advice from a broker, because the broker is your personal insurance representative, they are able to offer you policy options from as many insurance companies as they have received terms of business from. The number and prestige of the underwriters choosing to work with a broker can indicate (in addition to the license and regulatory obligations) the trustworthiness and capabilities of the insurance broker you are considering working with.

This does not necessarily mean the broker is an affiliate partner of the insurance underwriter, or that the broker is even a part of an underwriter’s “network.” The broker must independently obtain permission from each underwriter in order to sell that insurance company’s products. The broker is, in all aspects, an independent entity when giving advice to customers – free of favor or bias when giving advice, in some cases simply due to the abundance of choice!

This is, on top of the broker acting in the customer’s interests, another major benefit of using an insurance broker.

More than just sales

As you are a customer of the insurance broker, and not the insurance underwriter (the company with their logo on the policy), the broker is in a position to support you over the lifetime of your policy.

Rather than dealing with multinational insurance companies with hundreds (if not thousands) of employees and complicated telephone systems, with an Insurance Broker like CCW Global you speak to a real person each and every time you pick up the phone, and you actually know your broker because you can speak to them at any time during business hours. Brokers are able to provide the assistance needed to navigate claims forms and situations where you may not have had a claim settled, but it should have been.

Put simply, most people are not experts in insurance and without fully understanding all the complex details of a policy, it can be intimidating (if not outright confusing). With an agent you are sold a policy and then left to deal with the insurance company. If you purchased directly from the insurance company, possibly via a website, then you are left to deal directly with the insurance company.

With a broker, however, you have instant and responsive access to answers when you need them, with the information that you need to make an informed decision.

Managing your policy renewal, conducting market benchmarks to ensure you’re not paying to much, helping with claims, adding new family members, removing old employees, changing vehicles, upgrading coverage, downgrading coverage… all these things which would otherwise pose a headache are managed, at CCW Global, by an efficient and experienced team of employees.

When you choose a broker, you’re buying insurance, but it is more than just sales.