Through the years, carriers and brokers have participated in the age-old RFP dance where brokers ask carriers for information such as program outline, marketing plans, rate scenarios, etc., and carriers provide standard responses and spreadsheets of information back. But in today's world, where information changes rapidly and your clients are demanding deeper and more thorough due diligence, how do you know that the old RFP process is the most efficient for you?
Using auto and home insurance programs as an example one of thefastest-growing and desired voluntary benefits consider the following factors to improve upon the current RFP process, which ultimately will bring higher overall satisfaction to your prospective clients:
Step 1: Use technology to your advantage to compare policy costs
Many of your clients believe that policy cost savings for their employees is a critical factor in choosing an auto and home program for a voluntary benefit. As such, you may be focusing the heart of your search on rates. So you and your clients develop a set of criteria and then ask prospective partners to provide their auto and home rates based on these parameters and assumptions. While this seems straightforward, unless each carrier is interpreting these assumptions the exact same way, the quotes you receive are likely not apples-to-apples. You likely get a wide range of rates, necessitating a time-consuming back-and-forth with carriers to confirm quoting assumptions and to make recalculations.
So how do you minimize your efforts and ensure the rates are true comparisons? With increased technology, all large insurance companies now have the capability to have actual customers use their online quoting engines to obtain real-time, accurate auto and home quotes. Brokers who have used this process have indicated a dramatic reduction in their efforts and increased comfort from knowing that the rates they are providing their clients are accurate and fair. Alternatively and with the same result you can have prospective customers supply their declaration page to each carrier in which the identical information can be entered into their online quoting engines.
Step 2: Sometimes, bigger means better
As many of your clients have operations and employees across multiple states, it's important to compare the participating carriers' presence in each of those states. Market share is a good indicator of how well a carrier has penetrated the marketplace with their message and value proposition.
If you don't already, require competing carriers to include market share and growth trends in a particular state or region over a three- to five-year span as part of the RFP response. Strong growth trends can also be used to show your clients the effectiveness of the carrier you are proposing and help in validating their worthiness.
Carriers that have a strong market penetration in your clients' geographic areas are likely to have had success with their programs. Conversely, weak penetration can indicate a number of things that may doom a voluntary benefit program, including poor brand awareness, absence of value-added marketing programs and tools to support the campaign or non-competitive rates.
Step 3: If you calculate benefits of a program on policy costs alone, you could be missing half the equation
When choosing a voluntary auto and home benefits provider, simply measuring what your clients get in terms of rates for their employees may not be the full picture. The true value of an auto and home policy goes beyond the price the customer pays it lies also within the product features and ultimate service and protection it provides.
Make sure your RFP process calls for the carriers' service and claims records. Because while price may help guide a consumer to a policy decision, you risk ill will toward the program if the company provides your client's employees with service and claims support that fails to meet expectations.
Taking a holistic approach to the RFP process could be the most valuable way to ensure your clients are getting what they need out of an auto and home insurance program. And the time for brokers to build an auto and home book of business has never been better. Questions about health care reform cast doubt about the future earning potential of those core programs.
Yet, auto and home insurance provides great certainty for a consistent source of revenue. After all, it's the only voluntary benefit that is relevant to anyone who drives a car or owns or rents a home.
