You’re forced to insure via brokers.
If you think by insuring via a broker, you’ll be able to satisfy compliance that you have the best cover at the best price, you may be wrong, especially if your ‘broker” is the agent of any of the insurers to your insurance (risk transfer) program! Here is how to best solve your problem.
Understand the Traps of Procuring Insurance
- 1Insurance brokers are most likely agents of the insurer
(rather than you)
- 2The broker is likely to receive a commission on premiums, so a lower premium
means a lower income for the broker
- 3Your existing broker can block competing brokers from
obtaining a better price with the insurance company via a
process known as “reserving”
- 4Running a price tender on your insurance is a big mistake
because of reserving.
How to Obtain Better and More Transparent Insurance Cover and Cost
You need a process to review and appoint the broker rather than the insurer.
- 1Start six months before insurance renewal. (Seek advice from Comprara)
- 2Establish an insurable risk profile (see below) and undertake gap analysis.
- 3Benchmark your existing cover and cost against industry data
- 4Obtain Indicative covers and costs from a panel of brokers including your existing broker
- 5Review panel submissions and appoint a broker to provide an actual insurance quotation.
What is Insurable Risk Profiling?
In other words, so you can make sure you are not under or over insured.
The More Your Broker Complains
the More Likely You’ll Save
The more noise your incumbent broker makes about submitting to this process and requiring them to restate their capability, the more confident you can be that you will receive better cover at a reduced annual cost.
A broker who is doing a good job would have no difficulty in restating their capability, knowing that this is a basic governance requirement for all organisations. In our experience the incumbent broker is more often reappointed but usually on more favourable terms to the client.