Insurance broker or insurance agent: what is the difference for businesses?

Two different roles in insurance distribution, with practical implications for corporate risk management

In everyday language, the terms insurance broker and insurance agent are often used interchangeably. In practice, however, they refer to two different roles, with distinct mandates, responsibilities and relationships with the client. This is not just a technical distinction: it can affect the way a business analyses its risks, compares available cover and builds an insurance programme aligned with its needs.According to the classification of the Single Register of Insurance and Reinsurance Intermediaries, maintained by IVASS, agents are listed in section A and act in the name of, or on behalf of, one or more insurance companies. Brokers, on the other hand, are listed in section B, act on the client’s instructions and do not have powers to represent insurance companies.What does an insurance agent do? An insurance agent represents one or more insurance companies. Their role is to distribute the insurance products of the insurers with which they have a mandate, helping clients choose from the solutions available within that specific range.This model can be effective when the insurance requirement is clear, limited in scope and aligned with the offering of the insurer represented. An agent has in-depth knowledge of the products provided by their principal and can support the client during policy placement and management.For a business with more complex risks, however, the limitation lies in the market perspective. The analysis tends to focus on the solutions offered by the represented insurers, rather than on the wider insurance market.What does an insurance broker do? An insurance broker acts on behalf of the client. Their role is to analyse risks, identify insurance needs, compare solutions available across the market and negotiate with insurers to secure the most suitable terms.For a company, this means working with an adviser whose starting point is not the product, but the risk profile. That difference is significant. A manufacturing business, a service company, an international group or a public body does not simply need to “buy a policy”: it needs to understand which exposures should be transferred to the insurance market, which should be retained, and which should be mitigated through organisational, contractual or technical measures.Mandate, client interest and advisory role The main difference between a broker and an agent lies in whose interest the intermediary represents.In summary:- an agent acts in the name of, or on behalf of, one or more insurance companies;- a broker acts on the client’s instructions;- an agent offers solutions linked to the mandate received from insurers;- a broker searches the market for cover that best matches the client’s needs;- both are regulated intermediaries and must be registered with the RUI.The Single Register of Intermediaries is publicly accessible and allows clients to verify whether an individual or firm is authorised to carry out insurance distribution activities in Italy.Why a broker is strategic for corporate risk management For businesses, the choice between a broker and an agent should not be based solely on the cost of the policy. Premium is an important factor, but it is not the whole picture. Cover that is not aligned with the company’s actual risk profile may lead to gaps, overlooked exclusions, insufficient limits or overlapping policies.This is where the broker plays a key role: assessing the risk before assessing the policy. A broker can support the company in analysing exposures relating to civil liability, cyber risk, property, D&O, fleets, transport, credit, employee benefits and international programmes. The value lies not only in comparing offers, but in building an integrated insurance strategy.Verlingue: insurance advisory services for businesses In a market where risks are evolving rapidly, from cyber security to business continuity, from directors’ liability to asset protection, the broker’s role is becoming increasingly advisory.Verlingue is an Italian insurance broker and part of international insurance broking group Verlingue, a company of the Adelaïde Group. It supports businesses through risk management and risk assessment services, developing tailored insurance programmes to meet their specific needs. The objective is to help companies make more informed decisions, turning insurance from a simple requirement into a tool for protection, stability and growth.