Insurance Is Weird (But Important)
Insurance is a bit weird. You buy it hoping you never actually need to use it. If nothing bad happens, you get no “return” on your money — which is the best-case scenario! The second-best is something going wrong and you’re covered. It’s a reluctant purchase for most, so it’s no surprise people don’t really know how it works. They just buy it and cross their fingers they’re protected.
Who’s Who in the Insurance Industry
Underwriter
Let’s clear this up right away. While “underwriter” is a common term, it doesn’t directly impact you, the insurance buyer. An underwriter (who could be a person or even software) assesses risk and decides on the price and terms of your policy. They set the boundaries for what’s covered, what’s not, and how much it all costs.
Insurer
These are the big companies that actually issue the insurance policy and pay out if something goes wrong and you make a claim. They’re the ones holding the bag when you pay your premium.
Agent
An agent is essentially a salesperson for the insurance company. They work for the insurer, not for you. That means they can’t shop around — they sell only what their employer offers.
Broker
A broker works for you, the client (or at least, they’re supposed to!). Their job is to compare options across insurers, help you understand what’s in the policy, and recommend the right cover. They’re not tied to any specific insurer, so they can (in theory) find you the best deal.
Why All Brokers Seem to Offer the Same Policies
The difference isn’t what they can quote — it’s how they do it, how many options they look for (rather than just forwarding the renewal once a year), how well they explain them, and how transparent they are about their incentives.
Some big brokers offer “schemes” or discounted rates for specific industries, but that’s usually for large corporates. For smaller businesses, the difference is usually in service, not access.
The Truth About Broker Commissions
Here’s where it gets murky: Nearly all brokers are paid by commission. That means the more you pay in premiums, the more they earn, regardless of whether it’s the best policy for you. Very few brokers disclose this explicitly, upfront.
At Luma, we give clients the choice between a fixed advisory fee or a commission. Either way, we show you exactly what we earn before you commit. It’s that simple.
Luma’s Approach: Transparent, Not Tied
Unlike some brokers who prioritise volume bonuses or relationships with certain insurers, we:
- Go wide to find the most relevant cover for you - every year, not just the first one!
- Explain your options clearly — no jargon, no 40-page PDFs
- Disclose our earnings — always and upfront
- Let you choose how we’re paid
What Makes a Good Broker?
A good broker isn’t just someone who sends a few quotes. They’re someone who asks the right questions, understands your risks, and puts time into tailoring a solution — not just defaulting to the easiest insurer or the one that gives them a bigger commission.
Ensuring your broker is really working for you
Here are questions you should be asking your broker — and how we’d answer:
How many insurers did you approach for this quote?
It depends on your business. We’ll always explain who we went to and why.
Can I see the other quotes you received, even if they weren’t the cheapest?
Yes! We’ll break it down in plain English.
What are the key differences between these options?
See above — and ask us anything you’re unsure about.
How do you decide which insurers to approach?
Based on relevance, reliability, and price — not perks.
Do you earn the same commission from every insurer?
No broker does. But we’ll show you what we get. Every time.
Can you provide a breakdown of your commission or fees?
Absolutely. It’s in writing, upfront (if you ask your non-Luma broker this question, please video them and send it to us. Watching them squirm wil be great for our social media 😂)
What would you do differently if you were charging a fixed fee instead of commission?
Nothing. We actually offer a fixed fee, and that keeps our advice honest.
Experience Insurance Without the Hidden Costs.