Do you question whether you are getting the most value from your insurance broker? Are you doing everything possible to keep costs down and or feel that your benefit package is a commodity and not necessarily an employee retention tool?
Are you starting from scratch and need a new insurance broker?
The best first step is an insurance broker Request For Proposal, or RFP.
The first step when seeking health insurance for your company or commercial insurance coverage for your business whether you’re purchasing coverage for the first time or whether you’re considering changing policies, brokers, or carriers – usually starts with sending out RFPs to several insurance brokers and/or brokerage firms.
As the name implies, RFPs are simply requests made on behalf of the company which are typically sent to multiple brokerage firms in order to begin the process of vetting potential brokers with which the company may be interested in working.
While RFPs are in many ways synonymous with getting ‘quoted a price,’ these proposals often include additional information beyond merely the cost of services and coverage, which can be greatly beneficial in determining the range of services offered as well as the benefits (and potential detriments) of working with the particular brokerage firm providing each proposal.
Of course, in order to send out these RFPs, a company must first have identified potential brokers that they believe may be a good fit for assisting in their insurance coverage acquisition process and from which they attain more information.
Learn what makes a good insurance broker and see how to identify ones best suited to the needs of your business.
The short answer to this question is that RFPs should be sent out anytime your business is considering new or different commercial insurance coverage, but there are a number of other considerations that should be taken into account as well as potential events that may serve as good catalysts to trigger the need for change in an insurance broker and the accompanying issuance of new RFPs.
With all these considerations in mind, it’s also important to note that aside from the potential inefficiencies involved with the time and resources required to do so, there is no bad reason to reevaluate your insurance coverage and business insurance broker. The desire to refresh a policy that may feel otherwise stale or outdated is more than enough reason to look into making a change. Such decisions should always be made on a case-by-case basis and with the needs and context of your individual company in mind at the forefront.
Because RFPs are non-committal, there is theoretically no cap on the number of RFPs that a given company could issue, but there are practical limitations and efficiency considerations that should be accounted for when deciding how many proposals are requested.
A good analogy might be requesting quotes from multiple contractors for the construction of a new warehouse. In such a scenario, your company could (in principle) request as many quotes as there are contractors, but of course that would be a ridiculous and excessive time-wasting exercise in practice. Instead, you would be wise to narrow your search at the outset based on which factors are most important to your business, including local proximity, specific expertise (i.e. warehouse construction experience), recommendations/reputation, or any other factors you may wish to weigh in order to set the parameters of your search criteria as narrowly as desired before requesting quotes from the contractors deemed most likely not to waste your time.
The process of pre-vetting potential brokers in advance of sending out RFPs is an equally valuable preliminary step that can optimize the scope of your company’s search as well as allocating your time, energy, and resources more efficiently and effectively. To identify and locate a group of strong brokerage candidates in the pre-vetting phase of this process prior to sending out formal RFPs, search Mployer Advisor today.
At Mployer Advisor, our focus is creating transparency in the insurance and insurance broker, consultant and advisor space to the advantage of the employer. Analytics is our core and we will bring to light new information, tools and resources to aid employers in making more cost-effective decisions. As a phase I, we are here to help employers find the right broker or consultant and the right insurance company for them. Giving choice and initial transparency is a first step in creating an employer centric insurance marketplace.