What do companies need to consider when it comes to insurance brokers?
Insurance brokers are directly compensated by insurance companies for their advice, risk analysis and customer support. This takes the form of a brokerage fee charged to the insured company. Depending on the company, this brokerage fee can be several times higher.
It is often the case that many brokers do not transparently disclose the brokerage fees they receive each year. This can lead to conflicts of interest. In certain circumstances, brokers recommend a solution from which they earn the most, rather than the solution that would be best for the insured company. In practice, VZ has seen time and time again that companies often take out unnecessary insurance cover or are recommended providers that charge high brokerage fees.