International Federation of Risk and Insurance Management Associations’ White Paper: “Role of the Insurance Broker

This paper is being published to provide insight and guidance into the role of the broker from the perspective of risk managers. As an international association, IFRIMA represents risk managers in many jurisdictions throughout the world. Practices relating to the role of the insurance broker vary by jurisdiction, so that this paper is written to represent a view that is not restricted to the practices of a particular region.

The accountabilities of the risk manager include the purchase of appropriate insurance programs that effectively transfer residual risks. The placement of effective insurance programs requires access to the worldwide insurance and reinsurance markets, as well as the ability to develop and implement alternative risk financing techniques.

In defining how this residual risk transfer process is carried out, it is important to distinguish among those insurance-purchasing organizations that do not have an internal risk management function and those that do. In the first case, the broker has a broad advisory role in helping the organization to determine its insurance requirements as well as placing the insurance on their behalf. However, in more sophisticated companies, such as most of the member organizations of the IFRIMA associations, where there is an individual designated as the internal risk manager, the relationship with the broker is very different.

It is also the position of IFRIMA that in providing advisory transactional and administrative services, the insurance broker is clearly the representative of the insured organization. While the influence of large insurance brokers with insurance companies is an important asset, it should in no way change the nature of this relationship. As the insured’s representative, the broker must provide professional services to its clients with transparency and integrity.

View the two page white paper at

The International Federation of Risk and Insurance Management Associations (IFRIMA) promotes the advancement of risk management and its use through education and interaction. For more information, visit