Here's how companies can make sure that they are getting the best brokerage services for the needs of the company.
An RFP allows company risk managers to hear about:
- Emerging trends in the insurance industry
- Creative risk transfer solutions
- Improvements to be had with the current insurance programs
- Terms and conditions that can be either added to or deleted from the current insurance program
- Analytics that the insurance brokers use to identify and mitigate risk
- Underwriting and claims issues
A broker RFP process should be fair and transparent. Independent consultants, with no insurer or broker relationship, can manage the RFP process for companies that do not have the time or resources. In managing broker RFPs, SandRun Risk, in consultation with the company, identifies a limited number of insurance brokers that would be a good fit. Including both global brokers and regional brokers in the process can result in valuable and varied attributes being brought to the table. After identifying participating brokers, companies should make sure that each of the participating brokers executes a Non-Disclosure Agreement. Then, issue the written RFP to the brokers.
The RFP should be very detailed and include information on the company’s history, purpose and goals of the RFP, services included, the timeline, rules and procedures, page limitation, references, compensation details, and evaluation criteria. At the same time, a computer file sharing system should be set up and key documents (current policies, loss runs, etc.) are uploaded into the file sharing system. As a result, each of the insurance brokers participating in the RFP has access to and can review the same documents. If any of the brokers raise questions, those questions, and the responses to those questions, are shared with all of the brokers, not just the broker who raised the questions.
After the insurance brokers submit their written responses to the RFP, those written responses should be reviewed and summarized so that the responses can be compared from one broker to the next. Face-to-face interviews of the brokers should be scheduled so that the brokers can expand upon their written proposals and respond to questions raised by the company. It is important that the key members of the brokerage team who will be working on the company’s account are the ones participating in the interview. An impartial scoring system ensures that each broker is evaluated based on the same criteria. Thereafter, it is important that the broker references are called. The broker references are invaluable in getting insights into the broker’s services. Often the references have used other brokers participating in the RFP and their experience with those brokers is informative.
Brokers provide an invaluable service to companies. They have numerous resources, knowledge, and analytic tools to assist companies in their insurance purchasing. For companies, it is important to have a trusting relationship with their insurance brokers. With a fair and transparent broker RFP process, and good communication throughout, companies can effectively meet the risk management needs and goals they have set for themselves.