They provide reinsurance to insurance companies. In many markets, brokers provide non-life insurance as well as group life and group mortgage insurance. In countries like Japan, the broker is not empowered to conclude contracts, accept representations, and to receive insurance premiums. In such cases minimum capital requirements and solvency margins are not needed. Provisions of relevant information to the underwriters to assess the risk and decide the premium.
Design covers that meet the client requirements.
The very fundamental principle of spreading of the risk is actually practised by the insurance companies by reinsuring the risks that they have insured. Underwriting of a risk involves consideration of material facts on the basis of which a decision will be taken whether to accept the risk and if so at what rate of premium.