Over the course of our work a large number of questions have accumulated about our activities and the insurance market, which are asked regularly.
For this reason the Polis Re Insurance Center has opened a section “Interview with the Polis Re Insurance Center”, in which we will answer the accumulated questions from our partners, clients, insurance market participants, etc.
Question: What are the prospects for the “risk placement” service?
Polis Re Insurance Center: Every consumer of insurance services is interested in being given objective information about the insurance market. It is hard to assume that an employee of an insurance company will always be objective when presenting the insurance company he or she works for, for certain reasons. This is one of the reasons why businesses and individuals with a high level of insurance culture prefer to use the services of independent specialists in this field.
Question: Are you an insurance broker?
Polis Re Insurance Center: The company’s management decided to carry out its activities with the status of an insurance agency. Obtaining an insurance broker’s licence is in the company’s plans for the near future.
Question: Why, with your great experience and length of service in insurance, did you not obtain an insurance broker’s licence right away?
Polis Re Insurance Center: The services of an insurance broker differ little from the services of an insurance agency and have both a number of advantages and disadvantages. One of the significant disadvantages of insurance broker status is that a broker is not a representative of an insurance company and therefore does not offer insurance as a service. A broker operates in the insurance market as an independent legal entity offering its own services (the list can be found in the law). A broker’s licence is mainly needed for reinsurance, but, unfortunately, the domestic Kazakhstan reinsurance market is small, and amendments to the law that have entered into force and the recommendations of the AFN have tightened the requirements for foreign reinsurance.
The factors listed do not allow us to develop effectively as an insurance broker at this stage.
Question: How effectively can you cooperate with state-owned enterprises?
Polis Re Insurance Center: There are several requirements for the procurement of insurance services by state-owned enterprises and enterprises that are part of state holdings; here are some of them:
- Minimising the participation of intermediaries in the procurement of services; this is described in detail here.
- Increasing the share of Kazakhstan content in the services consumed. The Polis Re Insurance Center is a 100% Kazakhstan enterprise.
Question: Are you affiliated with any financial group?
Polis Re Insurance Center: We are not affiliated with any financial group or financial structure, either in Kazakhstan or abroad. Our policy in this area will not change, since one of the company’s objectives is to become a leading insurance center that interacts effectively with all participants of the insurance market on equal terms.
Question: What guarantees can you give to those who use your services?
Polis Re Insurance Center: In any business and under any contractual relationship, the most fundamental guarantee is the integrity of the company’s employees, faithfulness to promises given, the company’s mission and its principles.
If you have more questions, write to info@polisre.com or here.
Editorial note
The interview was published at a time when the company operated with the status of an insurance agency and the insurance market was supervised by the AFN. Much has changed since then: the regulator’s functions have passed to the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (ARDFM), and Polis Re now operates as an insurance broker – the service operator is Insurance Broker Kompetenz LLP. Below are explanations of the topics touched on in the interview that remain relevant.
What risk placement is
Risk placement is the selection of an insurer (and, where necessary, reinsurers) for a specific object or liability of the client. The work includes risk analysis, preparing a description for insurance companies, collecting and comparing proposals on price, limits, deductible and exclusions, agreeing the contract terms and supporting the client during claims settlement. For complex and large risks – industrial facilities, construction, cargo, liability – the quality of placement is often more important than the price of the policy itself.
Agent and broker: what is the difference
- An insurance agent acts on behalf of and on the instructions of an insurance company and offers its products.
- An insurance broker is a licensed intermediary who acts in the interests of the client: studies the need, compares the proposals of different insurers and helps to choose the best terms.
- A broker can also arrange reinsurance, including on the international market – see the reinsurance section for details.
Insurance for state-owned enterprises
State-owned companies and organisations that are part of national holdings procure insurance services under established procurement rules. In practice this means a formalised technical specification, requirements for the supplier’s qualifications, and deadlines and procedures for submitting bids. An intermediary can help the customer to describe the risks and cover requirements correctly, and help the insurer to prepare a proposal that complies with the documentation. The specific requirements are always determined by the procurement rules in force and the documentation of the particular tender.
Why the intermediary’s independence matters
If an intermediary is not part of the financial group of any insurer, it has fewer reasons to offer one company’s product at the expense of the client’s interests. Independence makes it possible to compare proposals on equal terms and to explain openly to the client the pros and cons of each option.
How to assess an insurance intermediary
- Check its status: the existence of a broker’s licence can be verified in the regulator’s register.
- Ask to be shown several proposals from different insurers, not just one.
- Find out who will support you when an insured event occurs.
- Pay attention to how thoroughly the intermediary explains exclusions and the deductible.
If you want to place a risk or compare the terms of several insurers, you can get a consultation or find our contacts.