Guides
Writing a broker RFP for a commercial insurance program
How to run a broker RFP: what to send, questions on compensation and claims advocacy, a scoring matrix, and how to avoid blocking carrier markets.
A broker RFP is a written request that asks several brokers to propose how they would place and service your insurance program. Its job is to compare service, market access, claims advocacy and compensation, not to collect the lowest quote. Done well, it takes about 60 to 90 days, involves a short list of three to five firms and ends with a written scope of services and a compensation agreement you understand.
When an RFP makes sense
An RFP is worth the effort when your program has grown past what your current broker serves well, when ownership of the brokerage has changed (see private equity and the consolidation of insurance brokers), when premium or complexity has jumped, or when you have not tested the market for several years. It is a poor fit when you are in the middle of a claim you want your current broker to finish, or when the renewal is 30 days away. Run the process two to four months ahead of expiration, ideally just after you have finished the the annual business insurance review: what to update.
For a small account, a full RFP is overkill. Interview two or three brokers using the question list below. For a mid-size or large account with multiple lines, a structured RFP is standard practice. See how to choose a commercial insurance broker for the smaller-account version.
The broker-of-record problem
One rule shapes the timing. When you sign a broker of record (BOR) letter, the carrier recognizes the new broker as your representative for that carrier, and the incumbent usually loses access to negotiate that market. Brokers who each approach the same carrier for the same account can also "block" it, because many carriers will quote through only one broker per account. To avoid this:
- Do not sign BOR letters until you have chosen.
- Ask each respondent to state which markets it would approach and for which lines, and give each broker an agreed approach list or market-by-market assignments.
- Tell the incumbent that you are running a process; do not ask them for confidential information they cannot share about their own markets.
What to send respondents
Send the same package to every firm so proposals are comparable.
- Company profile: operations, locations, employees, revenue, contract and customer types, growth plans, M&A.
- Program summary: current policies by line, carrier, limits, retentions, premium, expiration dates and broker compensation if you know it.
- Loss information: five years of loss runs, large losses with a short narrative and any open litigation.
- Exposure data: payroll by class, vehicles and drivers, schedule of values, products and contracts exposures.
- Pain points: what the incumbent does poorly, coverage disputes, audit problems, slow certificates, claim handling issues.
- Process and timeline: questions deadline, proposal due date, finalist presentations, decision date, effective date.
- Confidentiality: a short non-disclosure agreement if you share sensitive claim data.
If the submission is thin, respondents price their uncertainty. The standards in how to prepare an insurance submission underwriters will read apply here.
Questions that separate brokers
Ask for specifics that cannot be answered with brand language.
Team and service
- Who will be on my account day to day? Please give names, roles, years of experience and credentials, and how many accounts each person handles.
- What is your turnaround time for certificates, endorsements and claim inquiries?
- Do you have in-house claims advocacy, loss control, analytics or benefits staff, or do you outsource them?
Market access
- Which carriers would you approach for each line, and what percentage of your premium goes to each? Do you have access to program business, managing general agents, wholesalers and the surplus lines market?
- What was the rate outcome for comparable clients at the last renewal?
Claims
- Describe the last significant claim that went badly for a client and what you did.
- Who attends adjuster meetings and mediations?
Compensation and conflicts
- How are you paid: commission, fee or both? What is the dollar amount on my current program, and on the proposed one? See how commercial insurance brokers get paid.
- Do you or an affiliate receive contingent commissions, supplemental commissions, premium finance revenue or any other income tied to placement? On which carriers?
- Do you own or have a financial interest in any carrier, MGA, premium finance company or third-party administrator you might place me with?
For employee benefits, ask respondents to describe the compensation disclosures they provide to group health plan fiduciaries. Federal law (the Consolidated Appropriations Act, 2021) requires covered service providers, which include brokers, to disclose direct and indirect compensation to ERISA plan fiduciaries; confirm the current rules with your benefits counsel.
References and conflicts
- Three client references in my industry and size range, at least one a client who left.
- Any pending regulatory actions or litigation involving the firm, any acquisition or ownership changes in the last three years.
A scoring matrix
Weight the criteria before reading proposals so a good presentation does not rewrite your priorities. Here is a hypothetical weighting for a 150-employee manufacturer:
| Criterion | Weight |
|---|---|
| Industry experience and references | 20% |
| Account team and service model | 20% |
| Market access and placement strategy | 20% |
| Claims advocacy | 15% |
| Risk management, loss control and analytics | 10% |
| Compensation transparency and cost | 10% |
| Technology and reporting | 5% |
Score each proposal 1 to 5 on each criterion, multiply by weight and total. The numbers are an illustration, not a standard. Revise them to your situation. A tool like the business insurance quote comparison worksheet helps once you reach quotes, and the Total cost of risk (TCOR) calculator can compare programs when retention differs.
Evaluate the proposals
- Read for specifics. Names, dates and numbers beat adjectives.
- Check the strategy, not just the price. A broker that proposes a different structure (higher retention, a captive feasibility study, a program restructure) may be doing more thinking than one that promises a lower premium on the same program.
- Beware of promised savings. A forecast of premium reduction before underwriting has seen the data is a marketing statement.
- Compare compensation. A lower commission with fewer services may cost more overall. Fees for services above the base should be defined in writing.
- Interview the team, not the pitch team. Ask the people who will service you to join the finalist meeting.
After you choose
- Get a written scope of services: certificate turnaround, renewal timeline, claim reviews, annual risk review, benchmarking.
- Put the compensation agreement in writing, including what happens if you add or drop lines.
- Sign BOR letters only for the lines and carriers agreed.
- Notify the incumbent in writing and request the files you need: policies, binders, loss runs, claims files, certificate records.
- Schedule a 90-day check-in.
Key takeaways
- An RFP compares service, access, claims advocacy and compensation, and should start two to four months before renewal.
- Send every respondent the same package and avoid blocking markets by coordinating which broker approaches which carrier before any BOR is signed.
- Ask direct questions about compensation, affiliated entities and contingent income.
- Set scoring weights before reading proposals, and meet the actual servicing team.
- Finish with a written scope of services and compensation agreement.