Bidding Your Insurance Finding the Right Partners

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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

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• 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.
• Managing Medical Professional Liability Risk An
  Insurance Primer
• Published by University Health System Consortium

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Insurance Broker Selection

• Definitions
• Broker
• Agent
• Direct writer
• Going direct

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Insurance Broker Selection

• Services performed
• Insurance placement
• Policy review
• Claims handling
• Loss control consulting
• Actuarial services
• Business continuity planning
• Captive feasibility and management
• Risk management department staffing

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Insurance Broker Selection

• Players
• Major brokers
• Marsh, Aon, Gallagher, Willis
• Regional Brokers or Agents
• Local Agents
• Niche Brokers
• Consultants

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Insurance Broker Selection

• Selection
• Needs assessment, service requirements
• Relationship with broker/underwriter (middleman
  or partner)
• Bid insurance versus bid brokerage services
• Constraints institutional or legal
• Politics
• Decision method executive versus committee
  approach
• Broker Agreement

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Insurance Broker Selection

• Selection Compensation
• Fee
• Commission
• Incentive based

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Insurance Broker Selection

• Bidding Insurance
• Determining who can bid
• RFP for insurance only or also insurance
  broker/agent services
• Unstructured bidding
• Bidders assigned insurance markets

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Insurance Broker Selection

• Bidding Services
• RFQ written response
• RFP to top responders to RFQ written or oral
  presentation
• Contract
• Broker of record letters
• Insurance required of broker

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Insurance Broker Selection

• Pitfalls
• Commission driven premium pricing
• Selecting firm/selecting individuals
• One broker or more?
• Ethics
• Lunch, dinner, baseball
• Underwriting trips

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Insurance Broker Selection

• Monitoring the relationship
• Quality of service
• Evaluation against stated service requirements
• Qualitative evaluation
• Broker self-evaluation stewardship reports
• Compensation commission contingent (MSA)
  commission service fee incentives??
• Broker reporting
• Insurer reporting

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Insurance Broker Selection

• Questions?
• Thank you for your time