Bidding  Your  Insurance  Finding the Right Partners Connecticut Conference of Independent Colleges  Quinnipiac University...
<ul><li>“ Because the insurance broker is so critical to the development and implementation of the risk-financing plan, se...
Insurance Broker Selection <ul><li>Definitions </li></ul><ul><ul><li>Broker </li></ul></ul><ul><ul><li>Agent </li></ul></u...
Insurance Broker Selection <ul><li>Services performed </li></ul><ul><ul><li>Insurance placement </li></ul></ul><ul><ul><li...
Insurance Broker Selection <ul><li>Players </li></ul><ul><ul><li>Major brokers  </li></ul></ul><ul><ul><ul><li>Marsh, Aon,...
Insurance Broker Selection <ul><li>Selection </li></ul><ul><ul><li>Needs assessment, service requirements </li></ul></ul><...
Insurance Broker Selection <ul><li>Selection – Compensation </li></ul><ul><ul><li>Fee </li></ul></ul><ul><ul><li>Commissio...
Insurance Broker Selection <ul><li>Bidding Insurance </li></ul><ul><ul><li>Determining who can bid </li></ul></ul><ul><ul>...
Insurance Broker Selection <ul><li>Bidding  Services </li></ul><ul><ul><li>RFQ: written response </li></ul></ul><ul><ul><l...
Insurance Broker Selection <ul><li>Pitfalls </li></ul><ul><ul><li>Commission driven premium pricing </li></ul></ul><ul><ul...
Insurance Broker Selection <ul><li>Monitoring the relationship </li></ul><ul><ul><li>Quality of service </li></ul></ul><ul...
Insurance Broker Selection <ul><li>Questions?  </li></ul><ul><li>Thank you for your time </li></ul>
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Bidding Your Insurance: Finding the Right Partners

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Bidding Your Insurance: Finding the Right Partners

  1. 1. Bidding Your Insurance Finding the Right Partners Connecticut Conference of Independent Colleges Quinnipiac University Law School Thursday July 14, 2005 Beth Carmichael, Five Colleges John Lochner, Towers Perrin
  2. 2. <ul><li>“ Because the insurance broker is so critical to the development and implementation of the risk-financing plan, selecting a broker should be undertaken in a highly structured manner.” </li></ul><ul><li>Managing Medical Professional Liability Risk: An Insurance Primer </li></ul><ul><ul><li>Published by University Health System Consortium </li></ul></ul>
  3. 3. Insurance Broker Selection <ul><li>Definitions </li></ul><ul><ul><li>Broker </li></ul></ul><ul><ul><li>Agent </li></ul></ul><ul><ul><li>Direct writer </li></ul></ul><ul><ul><li>“Going direct” </li></ul></ul>
  4. 4. Insurance Broker Selection <ul><li>Services performed </li></ul><ul><ul><li>Insurance placement </li></ul></ul><ul><ul><li>Policy review </li></ul></ul><ul><ul><li>Claims handling </li></ul></ul><ul><ul><li>Loss control consulting </li></ul></ul><ul><ul><li>Actuarial services </li></ul></ul><ul><ul><li>Business continuity planning </li></ul></ul><ul><ul><li>Captive feasibility and management </li></ul></ul><ul><ul><li>Risk management department staffing </li></ul></ul>
  5. 5. Insurance Broker Selection <ul><li>Players </li></ul><ul><ul><li>Major brokers </li></ul></ul><ul><ul><ul><li>Marsh, Aon, Gallagher, Willis </li></ul></ul></ul><ul><ul><li>Regional Brokers or Agents </li></ul></ul><ul><ul><li>Local Agents </li></ul></ul><ul><ul><li>Niche Brokers </li></ul></ul><ul><ul><li>Consultants </li></ul></ul>
  6. 6. Insurance Broker Selection <ul><li>Selection </li></ul><ul><ul><li>Needs assessment, service requirements </li></ul></ul><ul><ul><li>Relationship with broker/underwriter (middleman or partner) </li></ul></ul><ul><ul><li>Bid insurance versus bid brokerage services </li></ul></ul><ul><ul><li>Constraints: institutional or legal </li></ul></ul><ul><ul><li>Politics </li></ul></ul><ul><ul><li>Decision method: executive versus committee approach </li></ul></ul><ul><ul><li>Broker Agreement </li></ul></ul>
  7. 7. Insurance Broker Selection <ul><li>Selection – Compensation </li></ul><ul><ul><li>Fee </li></ul></ul><ul><ul><li>Commission </li></ul></ul><ul><ul><li>Incentive based </li></ul></ul>
  8. 8. Insurance Broker Selection <ul><li>Bidding Insurance </li></ul><ul><ul><li>Determining who can bid </li></ul></ul><ul><ul><li>RFP for insurance only or also insurance broker/agent services </li></ul></ul><ul><ul><li>Unstructured bidding </li></ul></ul><ul><ul><li>Bidders assigned insurance markets </li></ul></ul>
  9. 9. Insurance Broker Selection <ul><li>Bidding Services </li></ul><ul><ul><li>RFQ: written response </li></ul></ul><ul><ul><li>RFP to top responders to RFQ: written or oral presentation </li></ul></ul><ul><ul><li>Contract </li></ul></ul><ul><ul><li>Broker of record letters </li></ul></ul><ul><ul><li>Insurance required of broker </li></ul></ul>
  10. 10. Insurance Broker Selection <ul><li>Pitfalls </li></ul><ul><ul><li>Commission driven premium pricing </li></ul></ul><ul><ul><li>Selecting firm/selecting individuals </li></ul></ul><ul><ul><li>One broker or more? </li></ul></ul><ul><ul><li>Ethics </li></ul></ul><ul><ul><ul><li>Lunch, dinner, baseball </li></ul></ul></ul><ul><ul><ul><li>Underwriting trips </li></ul></ul></ul>
  11. 11. Insurance Broker Selection <ul><li>Monitoring the relationship </li></ul><ul><ul><li>Quality of service </li></ul></ul><ul><ul><ul><li>Evaluation against stated service requirements </li></ul></ul></ul><ul><ul><ul><li>Qualitative evaluation </li></ul></ul></ul><ul><ul><ul><li>Broker self-evaluation: stewardship reports </li></ul></ul></ul><ul><ul><li>Compensation – commission + contingent (MSA) commission + service fee + incentives?? </li></ul></ul><ul><ul><ul><li>Broker reporting </li></ul></ul></ul><ul><ul><ul><li>Insurer reporting </li></ul></ul></ul>
  12. 12. Insurance Broker Selection <ul><li>Questions? </li></ul><ul><li>Thank you for your time </li></ul>

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