1. 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

2. “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

3. Insurance Broker Selection Definitions Broker Agent Direct writer “Going direct”

4. 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

5. Insurance Broker Selection Players Major brokers Marsh, Aon, Gallagher, Willis Regional Brokers or Agents Local Agents Niche Brokers Consultants

6. 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

7. Insurance Broker Selection Selection – Compensation Fee Commission Incentive based

8. 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

9. 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

10. Insurance Broker Selection Pitfalls Commission driven premium pricing Selecting firm/selecting individuals One broker or more? Ethics Lunch, dinner, baseball Underwriting trips

11. 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

12. Insurance Broker Selection Questions? Thank you for your time