EXPLAINED: Managing broker tenders

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A good broker will become the trusted partner of the insurance buyer, and should be able to offer advice on the buyer’s existing programme and challenge the buyer around new coverage, value-added solutions, programme design and innovation. A good broker will therefore require a detailed understanding of the buyer’s organisation, risk universe, current business performance and strategic plans, to ensure that appropriate cover is in place and the relevant disclosures are made.

Given this importance, a periodic tender is an effective tool to assess the strength of a broker’s relationships, both within the insurance buyer’s organisation and with the insurance market. The exercise presents an opportunity for the buyer to consider potential changes to its current programme, as well as providing the incumbent broker with the opportunity to demonstrate its skills, market leverage and commitment to retaining the buyer’s business.