Why can insurance companies save time and money when distributing products through brokers?

The correct answer highlights that insurance companies can save time and money by not having to manage the direct administration of each product with clients. When insurance products are distributed through brokers, these intermediaries handle the sales process, which includes explaining the products, answering questions, and processing claims. This delegation of responsibilities allows insurance companies to focus on core operations, such as underwriting and risk management, rather than engaging directly with every individual client for product distribution.

In this context, the role of brokers is crucial as they serve as a bridge between the insurer and the client, streamlining the sales and service process. By utilizing brokers, insurers can leverage the brokers’ expertise and existing relationships with clients, thus improving efficiency and reducing operational costs associated with direct client management. This practice also allows insurers to reach a wider market without the need to extensively expand their own sales forces or customer service infrastructures.

The other options do not accurately reflect the primary reason for time and cost savings. Regulatory requirements still apply regardless of whether products are sold directly or through brokers, and while brand visibility might improve through broker networks, it is not a direct contribution to saving time and money in the distribution process. Additionally, relying on brokers for customer service does not inherently lead to cost savings, as it may