We regularly speak with organisations that believe an insurance broker tender should involve several brokers.There is nothing inherently wrong with several brokers. For some organisations, a broad field may be appropriate. But the number can become a proxy for competition, based on the assumption that inviting more brokers means the market has been tested more thoroughly.That is not necessarily the case.The quality of a broker tender depends less on the size of the field and more on who is invited, what they are asked to demonstrate and how their proposals are assessed.A larger field may generate more responses. It does not automatically generate better information.The objective should be to create meaningful competition between brokers that are well suited to the organisation, then give each of them a clear opportunity to demonstrate the value they can bring.
Less can be more
Insurance broking is not always easy to compare through a standard tender process.Different brokers bring different strengths. One may have significant experience in the organisation’s industry. Another may bring specialist claims capability, access to particular insurance markets or a team with experience managing complex risks.The quality of the shortlist therefore matters.Rather than starting with a target number, organisations should consider which brokers have the capability, experience and resources relevant to their insurance program.The next step is making sure those brokers are responding to the same brief.Before approaching the market, the organisation needs to be clear about what it wants the tender to achieve. It may want to test remuneration, improve service, strengthen claims support, access additional expertise or determine whether its current insurance strategy can be improved.Those priorities should shape the process.In our experience, several things make a material difference to the quality of broker responses:
- Be clear about what is being tested. Brokers should understand what the organisation wants to achieve, not simply that the account is being tendered.
- Provide consistent information. Each broker should have the same understanding of the organisation, its risk profile, claims experience and current insurance arrangements.
- Make time for broker engagement. Organisations should be prepared to invest their own time in the tender process, including offering and attending Q&A sessions with each shortlisted broker. These discussions help brokers better understand the organisation’s risks, needs and priorities, leading to more informed and tailored responses.
- Ask questions that are specific to the organisation. Generic questions tend to produce generic answers. The tender should test how the proposed team would approach the organisation’s risks, claims and insurance requirements.
- Understand who will manage the account. The capability of the wider brokerage matters, but so do the people who will work with the organisation day to day.
- Set the assessment criteria before submissions arrive. This creates a clearer basis for comparing proposals and reduces the influence of any single feature, presentation or fee.
A good brief benefits the participating brokers as well as the client.It allows them to spend their time addressing the issues that matter to the organisation rather than trying to interpret a broad request or anticipate how the final decision will be made.Fewer well-selected brokers responding to a clear brief can therefore produce more useful insight than a larger field responding to a less defined process.
A consistent basis for comparison
Once submissions arrive, the challenge shifts from generating options to comparing them properly.Broker proposals can look very different. One may place greater emphasis on claims support, another on market strategy, technical capability or the proposed account team.Remuneration is important, but it should be considered alongside the broader service and expertise being offered.The incumbent should be assessed on the same basis.A tender should not begin with the assumption that the existing broker needs to be replaced. The incumbent may have valuable knowledge of the organisation, its claims history, insurer relationships and the development of the insurance program.The tender gives the incumbent an opportunity to demonstrate that the existing approach remains appropriate or forces them to critically analyse their legacy approach to the insurance placement, servicing team and remuneration , while giving other brokers the opportunity to put forward different ideas.A successful tender may result in a new appointment.It may equally confirm that the organisation already has the right broker and service model in place.What matters is having clear criteria that allow each proposal to be assessed consistently.
Independence creates a common standard
Broker submissions can be difficult to compare when each proposal approaches the organisation’s insurance needs differently.Risk Advisory Services manages broker tenders from the client’s side of the table.We first establish what the organisation needs from its insurance program and broker, then structure the tender around those priorities.That context is important when the responses arrive.A different service model, insurance structure or market strategy may look attractive on paper. The more important consideration is whether it represents a genuine improvement for that particular organisation.Having managed more than 100 broker tenders, we have seen how differently brokers can approach the same account.We use a structured 100-point qualitative assessment matrix to give those proposals a common basis for comparison, considering areas including service, technical capability, claims support, market access and pricing.Independence is an important part of that process.Risk Advisory Services is not competing for the broking appointment and does not receive remuneration from the successful broker. Our role is to assess the options from the client’s perspective and identify where meaningful differences exist.That means the incumbent and competing brokers can be considered against the same standard, with the focus remaining on which proposal best meets the organisation’s requirements.
A better tender creates a better decision
A well-run tender should give the organisation a clear basis for comparing the options in front of it.That means giving the incumbent a fair opportunity to demonstrate its value, allowing credible alternatives to present a different approach and assessing each proposal against the organisation’s priorities.The objective is not to collect the greatest number of proposals. It is to make a better-informed decision.
At Risk Advisory Services, that is what we believe an effective broker tender should achieve: a clear, independent assessment that gives the organisation confidence it has selected the right broker for its business.
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