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On September 28, Charlotte Haberaecker, the president and CEO of Lutheran Services in America, and I joined hundreds of elected officials, advocates and activists, and leaders of business, faith, and philanthropy from across America in Washington, DC at the White House Conference on Hunger, Nutrition, and Health—the first such gathering since 1969.

The previous conference directly led to the creation of groundbreaking programs like Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and Supplemental Nutrition Assistance Program (SNAP)—commonly known as “food stamps”—and the goals for this conference and the national strategy it rolled out are no less ambitious: ending hunger and increasing healthy eating and physical activity by 2030 so fewer Americans experience diet-related diseases— while reducing related health disparities.

Alongside representatives of other nonprofit organizations and every branch of government, we participated in small group sessions aimed at generating actionable ideas across the five major pillars of the new national strategy that can help make these goals a reality:

1. Improving food access and affordability;
2. Integrating nutrition and health;
3. Empowering all consumers to make and have access to healthy choices;
4. Supporting physical activity for all; and
5. Enhancing nutrition and food security research.

We were also privileged to hear from President Biden himself about how a lack of access to healthy, safe and affordable food and places to be physically active contributes to hunger, diet-related diseases and health disparities. Other dynamic speakers throughout the day-long session included Rep. Rosa DeLauro, Chair of the House Appropriations Committee, and Sen. Debbie Stabenow, Chair of the Senate Agriculture Committee. We ended our day with a call to action from Second Gentleman Doug Emhoff and White House Domestic Policy Advisor Susan Rice, who led a conversation with Gen Z nonprofit leaders Joshua Williams and Avani Rai.

We’re looking forward to continuing the work we began at the Conference and implementing new strategies alongside our member providers, especially for integrating nutrition and physical activity with healthcare.

Learn more about our advocacy efforts to reduce health disparities for people in America.

Now that you’ve learned about the broker selection process, you may have additional questions. While JKJ is always available to answer questions that you might have, here are some that we commonly hear from other organizations.

At what point during the insurance renewal cycle should this process take place?

Under ideal circumstances, it should be completed by the time you are ready to consider getting options for your insurance program renewal and before your current broker begins the renewal efforts. Give yourself time to conduct this process. This is an important decision. Six months before your renewal is not too soon.

How frequently should the broker relationship be reviewed?

This varies. Management may wish to review the relationship every 3-6 years. If things are going along well in the partnership, there may not be any need to review the relationship unless there is a concern. A good broker should be performing a stewardship review with you annually, which will probably drive this decision.

Are there times when this system doesn’t work at all?

Yes. If you have a situation where none of the brokers are specialists in your line of work, you may very likely end up in a situation where no single broker has a wide array of insurance markets. If this is the case, you may need to consider the traditional selection approach, or you could use this approach to determine which two brokers will have a chance to bid on your program. Either way, the system gives you the tools to select quality brokers and limit the number of brokers involved.

Are there times when this system works particularly well?

Yes. If you have multiple brokers who generally all represent the same markets, this allows the brokers to differentiate on something other than the insurance company relationships.

What are some of the most important variables to consider when using this approach?

The Risk Management resources and services that the broker can provide can make or break a program.

Who actually will be available to you and what are their qualifications and experience?

The expertise of the broker when working with your class of business is critical. It is important to know that the broker that you ultimately choose actually represents the insurance companies who will be the more likely ones that you will do business with. If five insurers control 90% of the market and the broker you chose only represents two of the five, then this could be a big problem!

What markets do the broker represent? What volume of business does the broker have with each? What insurance companies are most likely to earn the business? Why? Discuss the relationships involved. The opinions of references are key. If good references that can vouch for all the promises that the broker is making are not available, then you may just be listening to a hollow sales pitch!

Do I tell the brokers how they will be scored? Why not?

Don’t make the broker be a mind reader. Be open to the brokers you will interview and let them know what is important to you. You can do this verbally, in the form of a form letter, or in the form of specifications that you want to be sure that they respond to in their interview. Or … you may want to just leave this to the broker. If they know their business, they will have a pretty good feeling for what the important variables are for your business. Whether or not you choose to communicate this prior to the selection process, it is obviously important that you ultimately communicate these areas of importance to your broker.

How do I know the broker is bringing the best alternative to me?

There are several ways to accomplish this. Require the broker to present alternatives to you and provide you with sound reasoning for the basis of their recommendation. Analysis of the options should be standard protocol. Most people can determine fairly quickly if their partners are being open and honest with them. At a point, you need to trust your broker. This individual should be a trusted advisor just like your attorney or accountant. If you don’t trust them, you should fire them. Compensation Disclosure of broker compensation is completely appropriate. Feel free to ask that it be disclosed when quotes are provided, or in advance if you would like.

Remember, though, that fees/commissions are determined in large part based on the services that are provided. If you expect the fee to be charged to be part of the initial broker presentation, you will need to have clearly communicated what services you want in advance so that these fees can be set appropriately. The “chicken or egg” scenario arises here, because you may not know what you want until you know what is available. We recommend that you save the compensation question until a second interview after you have a complete understanding of what services you want, the frequency that you want them, etc… While compensation is fair game for discussion, you want to be fair about it. In the end, you will get what you paid for.

Conclusion

Let this system work for you. Don’t make it too complicated. Ask brokers what variables they think are important. Most of the brokers will guide you to their strong points and what they think is important! It is good to get input on your comparison variables from numerous sources. When you have been through this process and see the results that it can produce, you will likely be hard pressed to go back to the way you use to do it. Good luck!

This is the third entry of a three-part series of blog posts. Read the first and second posts. Find out more from Johnson, Kendall & Johnson or contact Rafael Haciski.

The broker selection process is a great tool for an organization to effectively and efficiently select the best broker and the best insurance company. The following outlines the steps that you can take to use the Broker Selection Process effectively:

#1: Management Commitment to the Broker Selection Process

It is important to determine in advance that you will either use or not use this process. You don’t want to get in a position where you start off using this process and then go back to the traditional way of selecting your insurance coverage during the same purchasing cycle. If you don’t like the end result, then you can go back to the traditional approach (or a hybrid scenario).

#2: Identify Potential Brokers

You might limit the number of brokers that you interview; however, this is the time to give a fair evaluation to many of the brokers/agents that call on you. However, many won’t know how to respond because they are just in the business of “quoting” insurance. This is a great time to hear what a few them have to say without having to go through “the quoting process” with all of them! Be reasonable with the number of interviews that you plan and don’t wear yourself out!

#3: Determine Selection Criteria

It is very helpful to do this in advance. Often, management will create a comparison tool to help fairly evaluate different brokers. After determining the variables to compare, you can give a weight to each variable in order to help you focus on the more important areas. Remember, this is your tool. You determine what variables are important and how important they are. We have provided a sample. Remember to think through all different dimensions of your broker relationship. In addition to the obvious insurance company considerations, policy differences and traditional agency services, consider risk management and claims management services as well. How can a particular broker assist you in managing all the costs of risk – both pre- and post-loss – not just your insurance premiums?

#4: Management Team Involvement

Consider incorporating your financial, clinical, and human resource staff into these presentations, as the material covered likely will affect all of these disciplines. All decision makers should be involved in the process. They will also benefit by learning what other services may be available in the marketplace.

#5: Interviews

Explain the process to the brokers who you will interview and let them know how much time that they will have with you for the interview/presentation. You might ultimately communicate what you are looking for from the brokers you will be interviewing in advance. This will involve far less time than you will spend with each broker if you have multiple brokers participate in “quoting” in the traditional sense. A broker that has a very thorough service driven program will likely need at least 60 minutes. Follow-up interviews may be granted to finalists if this will help.

#6: Rate Brokers

Some may prefer to use the tool more formally while others may allow instinct to guide them. Either way, be sure that you apply what works for you consistently.

#7: Communicate Decision

Upon selecting a broker, let all parties involved know your decision.

#8: Partnership

Your new broker should understand that they are now a partner with your organization in all aspects of your Risk Management and Insurance program. Your new broker should now solicit proposals from all appropriate companies and bring all proposals to you for your renewal along with an analysis of program options.

This is the second entry of a three-part series of blog posts. Read the first and third posts. Find out more from Johnson, Kendall & Johnson or contact Rafael Haciski.