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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.

Today’s Front Line Hero is Lutheran Life Villages, which is committed to keeping seniors healthy during the COVID-19 pandemic.

Lutheran Life Villages is a senior living facility with four campuses in Northeast Indiana. In addition to an array of senior living options, Lutheran Life Villages offers creative programming such as no contact boxing for individuals living with Parkinson’s disease, and a Foster Grandparent program, which matches seniors with low-income children in the community who are at risk of falling behind in school. They are committed to holistic care for seniors, and to building intergenerational relationships in the community.

Lutheran Life Villages recognizes the severity of the COVID-19 pandemic, and the enhanced risk for seniors and individuals with chronic conditions. To keep their residents safe, Lutheran Life Villages is taking necessary precautions, including restricting access, monitoring staff health, increasing their inventory of medical supplies, and communicating regularly with the Centers for Disease Control and Prevention (CDC) and their local and state health departments. The increased need for personal protective equipment is unprecedented, and Lutheran Life Villages is working to obtain needed supplies. President and CEO Alex Kiefer is forging new partnerships to gain those supplies, and has made trips to car manufacturing plants to pick up gowns and other supplies that are otherwise difficult to find.

Thank you to Lutheran Life Villages for your dedication to the seniors in your community!

By Emily Gross, Senior Manager of Program Development and Outreach

Growing up in the Avondale neighborhood in Chicago, high school senior Valery Trigsted first heard about Concordia Place when she was 13. At the time, some friends from school told her about Emerging Leaders, a program they were enrolled in that empowers teens through service-learning projects. Seeking something she could get involved in after school, Valery joined her friends in the program and started spending time at Concordia Place cooking, creating arts and crafts, and gardening. What Valery did not realize is this was just the beginning of a five-year journey that would make her a leader among her peers.

Valery’s experience at Concordia Place came at a significant time in her life, after her father passed away when she was in the seventh grade. Through the program, she collaborated with other young people who she says are now her best friends, many of whom she knew from her school but had not had the opportunity to connect with otherwise. “Concordia Place was like a second home for me,” says Valery, “The people there made me who I am and made me feel comfortable and safe.”

Staff noticed early on Valery’s potential. Within one year of her joining Emerging Leaders, they offered her an internship with Ruckus Entrepreneurs, a program that gives youth ages 16-18 a unique opportunity to manage a socially responsible small business. Valery was just 14 when she began her internship.

Ruckus Entrepreneurs create and sell their own handcrafted body care products fashioned from organic, sustainable, and local ingredients whenever possible. Products include natural soaps, non-aluminum deodorants, and shea and lip balms. The business also gives back to the community through “Buy One, Give One” – with every purchase of a Ruckus body care product, they donate a product to an organization serving people in need.

Through her internship, Valery has learned product management and marketing and recently had her first foray into web design. After COVID-19, the Ruckus team explored online sales options and Valery has helped present several design options to Concordia Place leadership. She has also learned new communication skills that help her flourish as a leader. “Being a part of Concordia was probably the best decision I ever made. I was shy and timid before joining and it really brought me out of my comfort zone in different times. The people you meet, the different opportunities, and seeing how much people care about you – I couldn’t turn that down.”

Valery is now using her leadership skills to engage the greater community and help others. She recently joined the Thrive Teen Advisory Board in Chicago and is also an organizer for the Midwest Workers Association, an advocacy initiative focused on the needs of South Side residents. When asked what her goals are for the future, Valery says, “I wish to instill change where I see fit and remove the disparities that are in place right now for various reasons.”

Valery’s time at Concordia Place will soon come to an end; she is now 18 and will graduate high school this year. As she reflects on her internship and Emerging Leaders, she said she will no doubt carry her experiences forward. “Their goal is to create leaders, and that’s what they did with me.”

Concordia Place is a member of the Lutheran Services in America network and provides growth and opportunity to 800 children, teens, and adults each year, no matter their age or circumstance. To find out more, please visit their website www.concordiaplace.org.