As an intermediary between the insured and the insurer, a broker provides added value to both parties even though they only officially represent the insured. They promote market competition and aid in the development of a modern mechanism for insurance. Furthermore, they use their professional knowledge and understanding to seek the most cost-effective and comprehensive coverage for their clients, thus contributing to a fairer and more effective market operation for the consumer.
　　　　

２. To raise China's standards of practice to an international level

From a macro-prospective, the economic relationship between China and the world market is expanding rapidly. Since joining the WTO, China's insurance market deregulation has allowed more foreign insurance company investment, helping to liberalize the market. This will bring the Chinese market in line with the rest of the world in the long term. The establishment of an insurance broking system plays a fundamental role in achieving this goal. By proactively introducing new management concepts and systemized operational practices, an effective broker system can help raise the Chinese insurance market to a truly international level.

　

Insurance brokers are insurance experts. They are trained to differentiate amongst products offered by various insurance companies and intimately understand the ebbs and flows of an often volatile market. They possess professional knowledge of an insurance product's design and the specific underwriting requirements of insurance companies; they are trained to interpret policy wordings; and they understand the intricacies of claims management, capital implementation and financial arrangements. A successful broking firm is a team of professionals, skilled in broking techniques and having substantial market connections. Involving brokers in insurance arrangements prevents situations whereby policyholders buy incorrect or inadequate insurance cover for their needs.

Moreover, many insurance contracts are highly technical and are not easily understood by the general public - thus the need for professional advice. An independent, knowledgeable and dedicated broker can easily fill this need to the ultimate benefit of their client.

Up until recently, insurance agents were regarded as the only insurance intermediaries in China, and still form the main sales force of Chinese insurance companies. Insurance agents are convenient in that they place policies quickly for the insured, but ultimately they are acting on behalf of their employer - the insurance company. An agent's fundamental interest, therefore, is the same as their employer's. This can result in a conflict for the agent between the best interests of their client and their employer. Brokers, on the other hand, are independent and are subject to the demands of their client alone.