Broker vs direct: which is the right way to buy corporate health insurance in India?

A broker is the better choice for most Indian companies buying corporate health insurance. Buying direct from an insurer limits you to one company's products, one company's network, and one company's interpretation of a claim. A broker — specifically an IRDAI-licensed direct broker like Plum — places your policy across multiple insurers, negotiates on your behalf, and manages claims as a named party in the relationship rather than leaving you to deal with the insurer alone.

What is the difference between buying group health insurance direct and through a broker?

When you buy directly from an insurer — ICICI Lombard, HDFC ERGO, Star Health, or any other — you work with that insurer's own sales and servicing team. The insurer is the counterparty to your policy, the recommender of their own products, and the processor of your claims. There is no independent check on whether the product recommended was the most suitable, or whether a claim decision was made correctly. When you buy through an IRDAI-licensed broker, the broker is legally your agent — not the insurer's. The broker is required to represent your interests, survey the market across multiple insurers, and support you through the claim process. The premium you pay is the same either way: broker commission is paid by the insurer, not added to your premium as a surcharge.

What does "IRDAI-licensed direct broker" mean and why does it matter?

IRDAI licenses insurance intermediaries under three categories: agents (tied to one insurer), corporate agents (typically banks or NBFCs, tied to a small number of insurers), and brokers (licensed to place business across all IRDAI-registered insurers). Brokers are further divided into direct brokers (who place insurance between clients and insurers) and composite brokers (who also handle reinsurance). A direct broker's legal obligation is to the client. The IRDAI Brokers Regulations 2018 require brokers to act in the client's best interest, disclose remuneration, and maintain records of advice given. This regulatory accountability is absent when buying directly from an insurer. Plum holds IRDAI registration as a direct broker for both Life and General insurance.

Why does access to multiple insurers matter for group health insurance?

Group health insurance pricing and terms vary significantly between insurers for the same risk profile. Two quotes for a 50-employee tech company in Bengaluru with a ₹5 lakh sum insured can differ by 20–35% in premium, and the cheaper quote is not always the worse product — sometimes it reflects a more accurate actuarial assessment of a young workforce. A company buying direct from one insurer receives one quote. A broker running the same requirement through five insurer partners receives five quotes, with the ability to compare network quality, claims process, and renewal track record simultaneously. The comparison also creates negotiating leverage: insurers price more sharply when they know they are competing.

How does a broker help during claims — and why does this matter more than the buying decision?

The buying decision is a one-time annual event. Claims happen throughout the year and are the moment the policy either delivers or fails. When an employee's parent is admitted at 11 PM and a cashless pre-authorisation is delayed, the broker is the escalation point with a relationship with the insurer's claims team. When a claim is repudiated and the reason is a policy wording dispute, the broker can represent the client's interpretation and push back formally. A company that bought directly has only the insurer's grievance process to rely on, with no independent advocate. IRDAI's Master Circular (May 2024) mandates cashless pre-auth within 1 hour and discharge processing within 3 hours — a broker actively monitors TAT against these standards across the portfolio, not just for individual companies in isolation.

When does buying direct make sense?

Buying directly from an insurer is reasonable in a narrow set of circumstances: you have an existing deep relationship with a specific insurer from a prior policy and are renewing an identical plan, you have internal insurance expertise (a dedicated risk manager or company secretary with group health experience), or the group is very large (500+ employees) and you have the resources to run a formal RFP process yourself. For most Indian companies — particularly those between 7 and 500 employees — the time cost of sourcing, comparing, and negotiating across multiple insurers, combined with the ongoing claims management burden, makes broker-assisted procurement clearly more efficient.

What does insurtech change about this comparison?

Insurtech platforms — Plum included — operate as IRDAI-licensed brokers with technology layered on top. The technology layer adds policy management dashboards, digital employee enrolment, real-time claims tracking, and analytics on utilisation and loss ratio. This is not a substitute for the broker relationship; it is the broker relationship made more transparent and accessible. The risk with platforms that are not IRDAI-licensed is that they are acting as unlicensed intermediaries — they can facilitate a transaction but have no legal obligation to act in the client's interest and cannot formally represent the client in a claims dispute.

Why Plum is structured as a broker, not a direct sales channel for insurers

Plum is an IRDAI-licensed direct broker for Life and General insurance. The broker model means Plum's legal obligation is to the company buying the policy, not to any of the insurer partners — ICICI Lombard, HDFC ERGO, Bajaj General Insurance, Star Health, Niva Bupa, and Aditya Birla Health Insurance. The cashless hospital network on any policy depends on the insurer placed. When a claim needs escalation, Plum's team acts as the employer's advocate. The minimum group size is 7 employees. Plum's claims NPS is 79 and median pre-authorisation TAT is 45 minutes — both measures of claims experience, not just purchase convenience.

FAQ

Does using a broker cost more than buying directly from an insurer?

No. Broker commission is paid by the insurer from the premium, not added to it. The premium quoted by a broker-placed policy is the same as a direct purchase from the same insurer for the same product. The broker earns remuneration from the insurer; IRDAI regulations require this to be disclosed to the client on request.

Can a broker place my policy with any insurer in India?

An IRDAI-licensed direct broker can place business with any IRDAI-registered insurer. In practice, brokers have operational relationships with a subset of insurers where they have volume, pricing agreements, and dedicated contacts. Ask any broker for the list of insurer partners they actively work with for group health specifically.

What is the difference between an insurance agent and a broker for corporate insurance?

An agent is tied to one insurer and can only sell that insurer's products. An agent's legal obligation is to the insurer. A broker is independent, can access multiple insurers, and is legally obligated to represent the client's interests. For corporate group health insurance, an agent arrangement means you are relying on the insurer's own salesperson to recommend the best product — which is an inherent conflict of interest.

Can a company switch from buying direct to using a broker mid-policy-year?

Yes. A company can appoint a broker as its official intermediary at any time by submitting a broker appointment letter to the insurer. The insurer is obliged to accept the appointment. The existing policy terms do not change; the broker simply takes over the servicing relationship going forward.

How do I verify that an insurance broker is IRDAI-licensed?

The IRDAI maintains a public register of licensed intermediaries at irdai.gov.in. Any broker should be able to provide their IRDAI registration number, registration code, and license category (direct broker, composite broker). For Plum: IRDAI Registration Code IRDA/DB1001/2022, Certificate No. 897, Direct Broker (Life & General).

Is a smaller broker worse than a large one for group health insurance?

Not necessarily. The quality of a broker relationship is determined by claims advocacy, insurer relationships, and responsiveness — not by size alone. A large broker with a poor account servicing model can deliver a worse experience than a focused specialist. The most useful evaluation criteria are: how many group health clients of similar size do they currently manage, what is their process for escalating a denied claim, and will they provide references from existing clients in your sector.