How To Become An Insurance Broker In Australia?

Do you look for a stable career where you can use your negotiation skills to help people protect their valuable assets? If yes, consider becoming an insurance broker in Australia.

Insurance brokers are licensed financial advisers who provide professional advice on insurance products and policies most suitable for the specific needs of people.

To become an insurance broker in Australia, you must complete a Certificate III in Insurance Broking and earn an Australian Financial Services Licence. Further, follow up with a Diploma in Insurance Broking and gain work experience via an internship or traineeship.

This article gives you detailed knowledge about an insurance broker's role, responsibilities, skillset, qualifications, salary, courses, license requirements, job prospects and the steps to becoming one.

1. Who Are Insurance Brokers?

Insurance brokers are organisations or individuals working for their clients, providing advice on business, trades, personal and property insurance. Their services adhere to the established professional standards for financial advisers.

Insurance brokers address the diverse client's needs and determine the right insurance product that includes:

• Life insurance

• Health insurance

• Income protection insurance

• Motor insurance

• Travel Insurance

• Funeral insurance

• Property insurance

• Personal accident insurance

These professionals know various insurance products and have connections with numerous insurance companies. It enables them to identify and recommend the most appropriate insurance product for clients.

As insurance is a vast industry with different insurance products and services, most insurance brokers specialise in a specific insurance niche. These include life, health, general, and travel insurance.

2. What Does an Insurance Broker Do?

Insurance brokers are licensed professionals offering advice on applicable costs, exclusions, and benefits, negotiating premiums and explaining conditions and circumstances to each client.

Following is the list of duties and tasks they are entitled to carry out while working in this profession:

• Prepare a list of potential clients and contact them to check if they are interested in buying an insurance product.

• Interview potential businesses and individuals to understand and evaluate risks to find assets that need to be insured.

• Research different insurance plans and provide a comparison based on their costs, features, benefits, and exclusions.

• Explain the conditions, risks coverage, premium rates, and advantages of different insurance policies to clients

• Recommend the ideal type and amount of insurance product coverage based on clients' requirements. 

• Offers advice on personal, corporate, and commercial insurance products to clients

• Liaise with several insurance service provider companies 

• Negotiate policy conditions and premiums with insurance companies on behalf of clients 

• Arrange customised insurance packages from a wide range of insurance companies. 

• Act for their businesses or clients in the event of an insurance claim and offer assistance for hassle-free execution

• Regularly review the lifestyle and financial condition of the client to ensure the appropriateness of their level of coverage.

• Advertise their services to expand their client base 

• Collect premiums from their clients on behalf of insurers

3. Why Should You Become An Insurance Broker?

In today's uncertain world, it has become necessary to get insured. Investment in insurance products provides monetary assistance in death, illness, disability, or any other unforeseen situation.

Pandemic situations like the coronavirus caused a higher demand for insurance policies and products.

With more and more people becoming conscious about protecting themselves and their close ones from unexpected events, the demand for insurance products and brokers will continue to remain high for many years to come.

Still deciding whether you should become an insurance broker? Here are some convincing reasons that make this profession worth pursuing:

• The profession gives you the opportunity and responsibility to play a crucial role in protecting people and their valuable assets through insurance products.

• As an insurance agent, you educate people on the importance of insurance and get them adequate coverage to cope with the emotional stress and financial strain and live a peaceful life.

• The profession allows you to decide your working hours, which helps you manage your other personal and professional commitments. 

• When working as an insurance broker, there is no limit on how much you can earn. It depends on how well you can convince people to buy your products and services to secure their future. 

• Commissions, bonuses, and carrier-sponsored trips make the profession lucrative. As you get a certain amount of experience, word-of-mouth publicity will help you find more clients and earn more money.

• Working in this profession gives you a sense of satisfaction when you help people planning to avoid financial struggles for an unanticipated crisis such as death, disability, theft, or illness.

4. What Skills Do You Need To Become An Insurance Broker?

A career as an insurance broker is a people-centric profession that requires meeting several people and collaborating with insurance companies daily. 

Insurance brokers need interpersonal skills, analytical thinking, and technical knowledge.

So here is a complete list of skills that employers look for in a job applicant:

• Passion for helping people manage their risks and get peace of mind

• Excellent conversational skills

• Strong negotiation skills

• Good ability to research

• Numerical proficiency

• Methodical and organised

• Efficiency

• Able to build rapport and positive relationships with people

• Good listening skills

• Empathy and understanding

• Trustworthy

• Confidence

• Sound judgment

• Perseverance and motivation

• Dedication

• Decisive

• Great problem-solvers

• Meticulously detail-oriented

5. What Qualifications Do I Need To Be An Insurance Broker?

The following are the educational qualifications to become an insurance broker:

• Must be 18 years or above

• Complete your Year 12 education

• Undertake a Certificate III in Insurance Broking from an accredited institution

• Complete a Diploma of Insurance Broking course 

• Obtain an Australian Financial Services License or insurance broker license 

• A driver's license may be required to travel to clients' locations to serve them.

6. Steps To Become An Insurance Broker In Australia

Insurance is a regulated business in Australia. As per the regulatory requirements for insurance brokers, you must possess an insurance broker license in Australia to legally sell insurance products and services.

Here are the steps that will guide you in becoming a licensed insurance broker in Australia:

Step 1: Get Qualified

Besides the job-relevant skills and attributes, you also need to meet specific educational requirements. 

Completing a Certificate III in Insurance Broking at an accredited training provider is the first step to making a career as an Insurance Broker.

Ensure the provider you choose complies with the Australian Securities and Investments Commission Regulatory Guide 146.

Step 2: Take A Diploma Course

The second important step to becoming a licensed Insurance Broker is to complete a Diploma in Insurance Broking. The course helps students develop an understanding of the basics of insurance broking. 

It also teaches about building client relationships, risk analysis, understanding complex client needs, offering advice, and more.

Step 3: Gain Work Experience

Along with the qualifications, you need to obtain some on-the-job experience by working with a licensed insurance broker. 

You can gain work experience via an internship or a traineeship.

Step 4: Obtain Your AFSL license

The Australian Securities and Investments Commission governs the insurance sector. Upon completion of the training, you can apply for AFSL or get registered with ASIC to become an independent insurance broker.

You must note that the Australian Securities and Investments Commission has several registration requirements based on the type of insurance you want to work with.

Make sure to research the specific conditions and provisions to become eligible to apply for the registration.

Step 5: Get The Membership in NIBA

The National Insurance Brokers Association is the chief body for the intermediated insurance industry. 

A membership with this Australian insurance broking association is beneficial for starting an insurance brokerage in Australia.

It can benefit you with networking, professional personal development opportunities, and helpful resources that will prove beneficial throughout your career.

Some of The National Resources For Insurance Brokers Are:

• Australian Securities and Investments Commission

• National Insurance Brokers Association

• Australian and New Zealand Institute of Finance and Insurance

7. Relevant Courses For Insurance Brokers In Australia

Certificate III in Insurance Broking

The course gives you an in-depth understanding of the insurance market, the legal and financial obligations and the code of conduct that governs the insurance industry.

It is the best qualification for new entrants entering the insurance broking sector. Students learn negotiation and communication skills, fundamental insurance broking skills, retail insurance products, record management skills, and claims handling.

TAFE NSW offers a Certificate III in Financial Services course that develops the foundation to progress in a financial career. 

The skills learned during the insurance broker course in TAFE will help you make a confident start as a valued professional in the finance industry.

Diploma of Insurance Broking

The qualification provides advice to build and nurture client relationships, along with developing an understanding of the complicated client requirements and possible dangers associated with them. 

The course curriculum covers the following areas such as:

• Communication and negotiation skills

• Fundamental insurance broking skills

• Retail insurance policies and products

• Claims handling

• Record management skills

This qualification opens the way to obtain your Australian Financial Services Licence. It gives you the necessary tools to apply for jobs with an accredited insurance broker.

8. Working Conditions For Insurance Brokers

Workplace

Insurance brokers spend a lot of time in the office, contacting clients over the phone or email to identify new prospects or maintain relations with existing ones. 

They occasionally need to travel to homes or companies of clients to discuss/sell insurance products or to solve their insurance-related queries.

Tools and Technologies Used

Being an office-based job, these professionals mainly use standard office equipment, including printers, telephones, computers, calculators, and fax machines.

They use financial software to conduct a cost comparison of different insurance policies and compute the premium amount payable to the clients.

Nature of Employment

According to Job Outlook, around 85% of insurance brokers work full-time compared to the industry's average of 66%.

Most of them work in Insurance Services and the Finance industry.

Working Hours

When employed in an insurance company, an insurer would work standard working hours from Monday to Friday.

An average full-time insurance broker works 44 hours compared to the industry's average of 40 hours. A few of them also work part-time or for flexible hours.

Gender

Around 43% of the employed workforce in this sector is female. 

This shows that insurance is a great career option for aspiring female insurance brokers.

Age

The average age of workers in this profession is 42 years compared to the industry's average of 40 years.

9. Job Prospects For Insurance Brokers In Australia

According to Job Outlook, the insurance sector has observed moderate growth in the last five years and projects strong growth in the future. At present, around 9200 insurance brokers work in Australia.

The employment opportunities for insurance brokers are estimated to grow about as quickly as the average for all professions.

An ageing population, rising insurance costs, and amendments in government regulation could lead to job opportunities for insurance brokers.

The future career opportunities in this profession depend on the ability and experience of professionals.

Even though employment opportunities for qualified insurance brokers are available throughout the country, the maximum number of professionals work in Perth, Western Australia.

10. How Much Does An Insurance Broker Earn In Australia?

According to PayScale data 2022, the average salary of an insurance broker is $61,487 in a year. The average weekly pay for insurance brokers is $2231.

The earning potential of insurance professionals depends on their qualifications, experience, employer, the type of insurance they offer, the area of work, and how much business they make.

Based on Experience

• An entry-level Insurance Broker (< 1-year experience): AU$46,048 

• An early career Insurance Broker (1 to 4 years of experience): AU$54,321 

• A mid-career Insurance Broker (5 to 9 years of experience): AU$65,182 

• An experienced Insurance Broker (10 to 19 years of experience): AU$78,881

• Insurance brokers with 20 years and higher work experience: AU$88,983.

Based on City

As per Indeed 2022 data, the top-paying cities for Insurance Brokers in Australia are:

• Frankston VIC: $91,331 per year

• Melbourne VIC: $82,782 per year

• Perth WA: $77,628 per year

• Sydney NSW: $77,535 per year

• Brisbane QLD: $62,227 per year

• Forest Lodge NSW: $52,441 per year

11. Conclusion

A career in the insurance industry is rewarding and assures stable demand and longevity.

Businesses and people always look for qualified insurance brokers who can provide them with a specialist opinion and good insurance.

So, if you possess the right skills, why not put them to good use and start assisting people in securing their lives and assets?

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