Brokers are highly prevalent in the insurance industry. They act as intermediaries between the insured (or prospective insured) and the insurer, with the mission of providing guidance and securing the best possible conditions.
They are also highly active when it comes to insurance products linked to trade receivables management.
One of the main reasons for this strong presence lies in the complexity and technical nature of insurance policies. Whether for personal or professional purposes, very few policyholders have read and understood all the clauses in their contract.
Rooted in the principle of risk mutualization, insurance remains a financial product whose profitability partly relies on a precise contractual framework. This framework includes various clauses that, in exceptional circumstances, allow insurers to adjust or limit their commitments in order to manage exposure to high-risk events.
Moreover, the range of available insurance types continues to grow. In response to evolving consumer and business needs, insurance offerings are becoming increasingly complex.
Even in a relatively stable field like credit management, the diversity of products is striking:
Traditional first-dollar credit insurance.
- Top Liner.
- CAP, CAP+.
- Excess of loss.
- Co-structured excess.
- Single risk.
- Single risk multi-buyer and/or multi-insurer.
- Captive.
- ...and more.
Each category offers numerous possibilities in how the policy is structured to benefit either the insured or the insurer—such as premium rates, credit terms, indemnity conditions, self-arbitrage thresholds, etc. These are all crucial parameters that determine how effective a credit insurance policy will be for the insured.
Insurers' clients are typically companies—not credit insurance experts—unless they’ve hired a well-informed credit manager, which is mostly the case for mid-sized and large businesses. These companies often lack insight into current market conditions, both in terms of pricing and contract clauses.
Therefore, it is evident that these businesses require expert advice to clearly define their needs in the face of a highly diversified market—and negotiation support to obtain the best possible terms from insurers.
What are the broker's roles?
The credit insurance broker has several roles during both the setup and day-to-day management of the insurance policy. The first role is not directed at the insurer but at the client company. The broker must carry out a preliminary audit to understand the company's needs based on its industry and expertise in receivables management.
Some products, such as excess of loss policies, are intended for companies with advanced credit risk management and debt collection.
In contrast, first-dollar policies are better suited for companies looking to outsource risk management and debt collection to the insurer.
Choosing the right type of policy is therefore strategic and impacts how the business operates.For example, would you rather invest in an internal credit team or a service provider (the insurer) who can help you assess the credit limits to grant your customers?
Each approach has pros and cons: the first may involve more "non-revenue-generating" staff, while the second introduces dependency on the insurer (what happens if the insurer is too restrictive or unresponsive?). Once the need has been established, the broker performs numerous tasks (do not hesitate to challenge yours if they do not carry out all of these actions).
Optimisation of the economic conditions of the insurance policy
- Premium rate: The insurer's remuneration relative to revenue.
- Coverage rate: Percentage of the receivable indemnified in the event of a claim.
- Monitoring fees: Ongoing costs for buyers under surveillance.
- Profit-sharing terms: Conditions for returning part of the surplus if the policy is profitable for the insurer.
- Contractual clauses: Enforceability of coverage even after reductions, delivery instructions, discretionary zones, credit durations, maximum payment delays before declaring a default, etc.
- Regulatory compliance: The broker may also ensure the policy complies with local laws where it is issued.
Police management and administration
The broker handles ongoing policy-related needs (guarantees, claims) and annual reviews (profit-sharing, invoicing):
- Advocacy in case of rejections or partial approvals, using benchmarks from other insurers to exert pressure and clarify positions.
- Sharing financial information about buyers (defaults, financial statements, credit assessments).
- Claims management: Ensuring timely default reporting and insurer indemnification.
- Review of invoicing: Checking premium and monitoring fee calculations.
- Profit-sharing follow-up: Ensuring the insurer pays any due bonuses, which are sometimes delayed.
- Reporting: Preparing dashboards on key metrics like claims, declared turnover, and policy profitability.
- Satisfaction rate monitoring: Tracking how often coverage requests are approved.
- Arbitration reviews: Organizing and preparing review meetings between insured and insurer.
- Policy renewal management.
The broker's role is extensive. Without a broker, the insured must handle all of this themselves, which often results in a poorly utilized or suboptimal policy.Given the complexity, having a broker is highly recommended—unless the company employs internal specialists. Even then, staying up-to-date with market conditions is a challenge.
Brokers are particularly essential for single-risk policies, often tied to long-term export projects. Insurers in this niche rarely work directly with businesses.
In all cases, the company itself remains in charge of management to ensure that the broker and insurer fully fulfil their roles and that the broker actively supports the management of the contract, beyond mere formal monitoring, as can sometimes be the case.
You should feel entitled to expect a high level of service from your broker—ensuring the policy is optimized both contractually and operationally (approval rates, claims, etc.).Who pays the broker?
In most cases, the broker is paid a commission by the insurer. The client company doesn't pay the broker directly; the cost is built into the insurance premium. However, since the policyholder ultimately bears the cost, they have every right to know the broker's annual commission—usually between 10% and 15% of the premium.
One of the brokers' key arguments is that credit insurance costs less with a broker than without, despite the added commission. They claim that the financial benefits from optimized conditions more than offset their fee. The broker's position as an intermediary can create a conflict of interest between their role of defending their client's interests and their commercial and financial ties with insurers, which they must maintain.Which broker to choose?
Here again, the choice is vast. The number of brokers is high. Some are large multinationals operating in all areas of insurance. Others, while smaller, join broker networks to operate internationally. Some specialize in niche markets and offer personalized, local service. The choice depends on your company's needs. A multinational will likely prefer a global broker, while an SME may opt for one offering responsive, local service.
Typically, the broker is represented by one or two key individuals in charge of your account. These people will provide the actual service, so their competence and trustworthiness are essential. Human factors often outweigh commercial arguments or references.