The difference between car insurance agents and brokers in Singapore

Regardless of what type of car you drive here in Singapore the law states that you must secure car insurance if you want to operate a vehicle in Singapore. When you start to look for coverage, however, there is a good chance you will come across both agents and brokers. While there are many similarities between the two, there are a number of key differences between them that you should be aware of. Here, we define these differences along with some similarities between the two.

Similarities between brokers and agents

Car insurance brokers and agents do share a number of similarities. First and foremost, they are both intermediaries who can help you find and secure insurance. The best brokers and agents will have in-depth knowledge about the products they are selling and should be able to tell you exactly what you are getting into.

Beyond that, there are regulations in place for both brokers and agents in the city. In fact, agents and brokers are both required to be registered in order to offer products. This is done in order to help ensure that consumers are offered quality advice and not taken advantage of.

The other major similarity between the two is the fact that both agents and brokers are not official employees of an insurer. To be clear here, brokers and agents are not insurers. As mentioned above, they are intermediaries who work to connect you with insurers. The actual plan you secure is underwritten and offered by the insurer.  

Finally, the other similarity between the two is in how they are paid. Both will typically work on a commission basis. The important thing to be aware of here is that the commissions are paid by the insurer with it being a percentage of the premium paid by the people they introduce to the insurer. It is important to note here that the best agents and brokers will never charge individuals a commission. This comes only from the insurer. If you have a broker or agent asking you to pay a commission for an individual policy, you would be well advised to look for another intermediary.  

Highlighting the key differences between car insurance agents and brokers

While there are certainly similarities between the two intermediaries, there are also a number of key differences that you should be aware of.

Who the intermediary represents

This is arguably the single most important defining difference between the two. Agents usually only work exclusively with a small number of insurers while brokers will work with many different insurers.

In Singapore, the vast majority of agents will work with between one and three insurers, while brokers will tend to work with a wider number of insurers. In many cases, it is not uncommon to see brokers working with almost every licensed insurer in Singapore.

Products they offer

Because agents tend to work with a smaller number of insurers you will often see agents offering a limited number of products. For example, when it comes to car insurance some agents who work with only one insurer will be able to offer only the plans the insurer carries. In some cases, this would be 1-2 plans.  

What this means is that some agents will become experts in their partner’s products. This is great, but it might not be a big help when it comes to shopping for car insurance as their portfolio can and will be somewhat limited. It can therefore be hard to tell whether the plan offered by an agent really is the best on the market for you and your needs.

Brokers, on the other hand, work with a larger number of insurers. This gives them a wider overview of the products on the market. What this translates to for customers is the ability to shop around without having to contact a number of different agents or insurers.

The services on offer

Aside from products and insurer representation, you will often find that brokers tend to offer different services. In most cases, agents will pretty much just focus on helping you secure a plan. Many brokers will do not only this, and the best will also offer additional services.

These services can and often will differ by broker but in Singapore we have seen many brokers offer things like claims submission, renewal management, and even ongoing support throughout the whole time you have a plan with the broker.

The offering of additional services also highlights the fact that brokers exist to work for the client. Quality brokers will always leverage their additional services and wide selection of products to help you find the best plan and insurer based on your needs. Agents are often unable to do this as they tend to work to sell a single insurer’s plan.

Where they are registered/licensed

While both brokers and agents in Singapore do have to be registered, there is a difference in where they do so. Car insurance agents, indeed all insurance agents, are required to be registered with the General Insurance Association of Singapore (GIA), while brokers are required to register with the Monetary Authority of Singapore (MAS).

The key thing to be aware of here is that the MAS actually requires brokers to be not only registered but also licensed. The licensing requirements set by the Authority are much more stringent than those applied to agents. This means that licensed brokers in Singapore are more likely to truly be acting in your best interest and less likely to employ tactics that can come across as dishonest.  

Can Kwiksure Singapore help?

Kwiksure Singapore is a marketing entity of Pacific Prime Singapore, a fully licensed insurance broker in Singapore. As a licensed broker, we are able to work with a wide variety of car insurers in the city, and do indeed work with some of the best. Beyond that, we also provide a number of additional services that you will not find with agents. This includes claims support, management, and more, all provided at no extra cost to you.

If you are looking for car insurance in Singapore, why not contact Kwiksure Singapore for a free quote? Our advisors are here to help you find the best plan for your vehicle and budget.