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🤝 '''Insurance broking''' is the professional practice of advising clients on their risk exposures and arranging appropriate [[Definition:Insurance | insurance]] or [[Definition:Reinsurance | reinsurance]] coverage on their behalf, with the [[Definition:Insurance broker | broker]] acting as the client's representative rather than as an agent of the [[Definition:Insurance carrier | insurer]]. Unlike [[Definition:Insurance agent | agents]], who typically represent one or more carriers, brokers owe their primary duty to the buyer of insurance — sourcing the most suitable terms from the market, negotiating [[Definition:Premium | pricing]] and [[Definition:Policy wording | policy conditions]], and assisting with [[Definition:Claims management | claims]] when losses arise. Insurance broking encompasses both retail broking, where firms serve corporate and individual [[Definition:Policyholder | policyholders]], and wholesale or specialty broking, where intermediaries place complex or [[Definition:Surplus lines | surplus lines]] risks into the [[Definition:London market | London market]], [[Definition:Lloyd's of London | Lloyd's]], or other specialty venues.

⚙️ A broking transaction begins with the broker assessing the client's risk profile, often in collaboration with the client's [[Definition:Risk management | risk management]] team, and preparing a submission that presents the risk to potential insurers. In commercial and specialty lines, this submission may be circulated to multiple [[Definition:Underwriter | underwriters]] who each take a share of the risk — a process particularly characteristic of [[Definition:Subscription market | subscription markets]] like Lloyd's and the London company market. The broker negotiates terms across dimensions including coverage breadth, [[Definition:Deductible | deductible]] levels, [[Definition:Policy limit | limits]], [[Definition:Exclusion | exclusions]], and premium, then documents the placement through a [[Definition:Slip | market slip]] or equivalent placing document. On the reinsurance side, broking firms such as [[Definition:Aon | Aon]], [[Definition:Marsh McLennan | Guy Carpenter]], and [[Definition:Gallagher Re | Gallagher Re]] intermediate [[Definition:Treaty reinsurance | treaty]] and [[Definition:Facultative reinsurance | facultative]] placements between [[Definition:Cedent | cedents]] and reinsurers globally. Brokers are compensated primarily through [[Definition:Brokerage commission | commissions]] paid by insurers, though fee-based arrangements are increasingly common, particularly for large corporate accounts where transparency around remuneration is a governance priority.

🌍 Insurance broking plays an indispensable role in market functioning — brokers aggregate demand, create pricing transparency, and channel information between buyers and risk-bearers in ways that improve market efficiency. The global broking industry is dominated by a handful of large firms but also includes thousands of regional and specialist brokers whose deep expertise in particular industries or [[Definition:Line of business | lines of business]] provides critical value. Regulatory frameworks governing broking vary significantly: the UK's [[Definition:Financial Conduct Authority (FCA) | FCA]] regulates broker conduct and client money handling; the EU's [[Definition:Insurance Distribution Directive (IDD) | Insurance Distribution Directive]] harmonizes distribution standards across member states; and in many Asian markets, brokers must satisfy local licensing and capital requirements. As digital platforms and [[Definition:Insurtech | insurtech]] solutions automate portions of the broking value chain — from quoting and binding to policy administration — the profession is evolving toward a model that blends technology-enabled efficiency with the advisory judgment that complex risks demand.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Insurance broker]]
* [[Definition:Reinsurance broker]]
* [[Definition:Lloyd's of London]]
* [[Definition:Insurance Distribution Directive (IDD)]]
* [[Definition:Brokerage commission]]
* [[Definition:Subscription market]]
{{Div col end}}

Definition:Insurance broking - Revision history

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