Services | Insurance Broker Selection

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Insurance Broker Selection

This is one of our most popular services. We do not sell or broker insurance but we are experts in all forms of property/casualty and employee benefits insurance and therefore can provide truly independent and objective advice. Insurance brokers represent the interests of the insured consumer and the consumer has the right to select any insurance broker — and to control what insurance companies they approach to get quotes.

You should use our help if:

  • You think a competitor may be paying less than you are for property/casualty or employee benefits insurance
  • You've been told to brace yourself premium rate increases and you are unsure about your options
  • Last renewal your broker came in with renewal quotes at the last minute and did not leave you enough time to consider the alternatives or make a change of insurance companies
  • The account service person at your insurance brokerage is not timely in the delivery of certificates of insurance, surety bonds and other products and services that you need to conduct your business
  • There has been a change in ownership of your business and you need to choose between one broker or another
  • The broker reorganized and there has been turnover in the account service representatives handing your account
  • You feel that you have out-grown your insurance program and are in need of a "make over"
  • Your procurement policies require that the insurance periodically be tendered for competitive bidding.
  • You don’t have a full-time risk manager and are uncertain as to what the customary business practices are in regard to making changes
  • Your insurance program is fragmented and you feel that you may have too many insurance brokers and companies

Key Benefits

  • Improved risk management services from your broker and insurance companies
  • An efficient and fair selection process
  • A more equitable relationship between the broker's compensation and the value of the services they provide

 

Two Levels of Service

Conceptual Broker Selection —This is a "beauty contest" in which three or four insurance brokers present their credentials and ideas to serve you. The broker with the best credentials, service proposal and market leverage is awarded the business. 

Managed Broker Placement —The managed broker placement ends up in the placement or renewal of insurance policies at competitively bid prices. We think pitting one broker against another is the only way to ensure that your insurance is competitively priced. Otherwise, you'll have to take his or her word for it when he tells you "nobody else wanted to quote," or when she says, "the other insurance company had a higher asking price."

Activities Within an Insurance Broker Selection

  1. Prepare a time line that ideally starts 120 days from the expiration of your most important insurance policies.
  2. Formulate a concept of a best practices insurance program and identify the opportunities for improvement through the competitive bid process.
  3. Help you create a short-list of brokers and screen out those unqualified or unwilling to serve you.
  4. Prepare the invitation to bid letters to be sent to the participating brokers and schedule and facilitate your meetings with them.
  5. Compile the underwriting, claims and other premium rating information that they will need to prepare their conceptual proposals or obtain premium quotations.
  6. (Broker Placement) Assign the insurance brokers to their markets and coordinate their activities during the marketing phase.
  7. Prepare objective selection criteria (and score sheets) to use in evaluating the brokers’ written and oral proposals.
  8. Review the brokers' written insurance proposals and translate their service proposals and premium quotations into an "apples-to-apples" format.
  9. Review the specimen policy forms of any new insurance being offered.
  10. Facilitate the brokers' sales presentations.
  11. (Broker Placement) Negotiate the best and final terms of coverage and pricing.
  12. Recommend which broker to select.
  13. Advise you concerning the steps you must make to assure an orderly transition.
  14. Review the new insurance policies (when they are issued) after the broker selection has been made.

 

Analysis, Strategy and Advice = Solution

Problem » A casino gaming company used a national insurance brokerage concern whose CEO was indicted for insurance fraud. Connections in the business community between this disgraced brokerage CEO and a member of the board of directors of our client made this process a delicate matter for the risk manager to handle. Additionally, account executives of this brokerage concern got hired away by other brokers, including their client service executive.

Solution » We structured a fair conceptual broker selection contest with the leading brokers having teams dedicated to serving casino gaming companies. Management was able to select a new and better qualified boker. There was a clear economic advantage to making the change and all of the participants felt that they had been treated fairly.

Problem » A manufacturer of medical devices consolidated its manufacturing and distribution operations. During the move they were advised by a broker to change health, life and disability benefits insurance companies. Everything went wrong. They were hit with cost increases in excess of 20% and their employees had difficulty getting reimbursed for care at hospitals they had utilized for some time.

Solution » After identifying the mistakes made by the broker, we recommended bringing two other brokers in to present conceptual proposals. After changing the employee payroll contributions and completing the consolidation process, the health insurance program was re-rated and substantial cost roll backs achieved. The new broker also did a better job of getting their employees access to virtually all of the providers they had before.

Problem » A network of affordable housing agencies wanted to form a captive insurance company. After reviewing the member survey they had conducted, we advised them to engage an insurance broker to implement the association-sponsored program.

Solution » We helped them select the insurance broker best qualified to line up a fronting or servicing insurance company, guide them through the incorporation and capitalization process and secure the capital contributions from the network members. Less than a year later, they formed a Vermont captive insurance company that enabled their members to roll back the rate increases they had been forced to accept and to restore coverage lost in the hard property market of 2001.