How To Shop My Insurance

How to bid your property/casualty insurance program in the best way and in a manner that you can control and have a successful outcome

As a buyer, you want to get quotes to consider, have a thorough understanding of what each participant is offering, and be able to discern what is best for your company. Having some structure to the process will help. First decide your objective, which will be at least one of the following:

• Save money
  
• Better agent services
  
• Better carrier services
  
• Secure broader or different coverage terms
  
• Better people to deal with (hey, it happens)

Strict bid: Documents state bid requirements. Participating bidders will largely rely only on the documents provided. Specify what agent / carrier / consulting services are required. If you know what you want, and are confident enough in directing the broker, this is a viable way to see if you can drive down your costs.

Suggestions:

• Be as clear and detailed as possible with the specifications.
  
• Decide how to allocate markets, handle BOR issues, and clarify this in the specs.
  
• Provide usual underwriting information, such as COPE data, rating basis, and classifications.
  
• Include a list of the criteria that will be used in determining the winning bid.
  
• Note items that will preclude bids from being considered at all.
  
• Include required qualifications for the agent and carriers.
  
• Require that any part of the bid that is not in conformance with the criteria be noted and explained in writing.
  
• Include a disclaimer that buyer reserves the right to consider any other issues that are outside of the written specs, in awarding the bid.
  
• State the timeframe and in what manner winner and losers will be advised.
  
  

If you feel that you are not large enough, or have a staff that can do the items noted above, still do them in some basic form. Having these in place will lend integrity to the process, and save you time in the long run.

Request for proposal (RFP): requesting that the agent or consultant design an insurance / risk management program. For existing enterprises, there is no consideration to the current program with an RFP. This is a good way to go if you are not confident that your existing program is put together in the optimum manner, and you want to see if anybody smarter has a better mousetrap. Proposals are judged based on the findings of the agents risk analysis, and in what manner the agent prioritizes and addresses those exposures. RFP recognizes that agent’s risk management talents, level of insurance technical competency, and viable access to market resources can vary widely. The winning proposal will be based on the buyers decision making, considering services, price, and program design. The process will take some of your time, so as not to waste it, get participating brokers bio along with testimonials from his businesses that are similar to yours. Check him out before engaging so you don’t waste time later.

Conceptual proposal: This is like an RFP, but without pricing. It is a request for program design and services. Agents / consultants may require a fee for this, as there is no product sale. In lieu of that, they will likely require that they are allotted certain markets (carriers/underwriters/programs) from whom they exclusively will secure quotes, if their conceptual program is chosen. This is often done for a new business, or for an enterprise that presents somewhat unusual exposures.

The last ten years has been a soft or flat market. Underwriting standards are tightening, with some underwriters uninterested in new business, as they are content in increasing their renewal book. In this selective environment, it is important to take the right approach to the marketplace in order to realize success.

We are happy to discuss with you which of these approaches makes the most sense for you, or to act as a consultant in managing the process should you prefer that.