Transcript Document
Welcome to RIMS 2012 Annual Conference & Exhibition Familiarize yourself with the Emergency Exits Silence Cell Phone/Blackberry Your Feedback is very important to RIMS and to the Speaker(s). Please complete the session evaluation form and return to the door Monitor. (For (IND) industry sessions, please give the completed form to the moderator of the session.) Selecting and Working with a Broker April 17, 2012 RMG 102 Philadelphia, PA Presentation Outline • The Selection Process – Gordon Adams, Tri Marine Int. – – – – Identifying Broker Candidates Selection Criteria Invitations to Bid Broker Compensation • Working With a Broker – Todd Marumoto, Mattel, Inc. – – – – Ethics Administration Claims Loss Control • Working With a Broker (more details) – Hal Larson, Muscatine Foods Corporation – – – – Risk Financing Techniques and Alternatives Setting Performance Expectations Terminating a Broker Relationship International Insurance Brokers The Selection Process Gordon Adams Chief Risk Officer Tri Marine International The Selection Process • Why do you need a Broker? • How often should a Broker review be done? • How much time do you need? As a Rule of Thumb – 6 Months 1. Data Collection 2. Bid Parameters and Determination 3. Participant Determinations 4. Bid Specifications 5. Review Process / Interviews 6. Broker Selection & Service Agreement Negotiation Identifying Broker Candidates • • • • • Referrals Industry Associations Reputation Publications Ongoing Working Relationships – Yours – Risk Management Network Invitations To Bid • Reasons for Bidding • a. Operational Changes • • • b. Merger or Acquisition c. Broker Service Issues d. Assurance of Competitive Product & Pricing • Bidding Types a. Open Bid – (Governmental Agencies) • • • • b. Closed / Limited Bid 1. Selected Participants 2. Controlled Access to Information and Markets 3. Confidentiality Bid Specifications • Conceptual • Full Quotation – With or Without Market Assignments • Hybrid • Split Programs • Beauty Pageant • Conceptual / Risk Based RFP Process • Information to Provide to Brokers: – May Choose to Exclude Premium Information – Policies – Programs • • • • Insurers Limits Retentions / Letters of Credit Exposures – Engineering Reports – Loss Runs Selection Criteria • • • • • • • Industry Expertise Size & Type of Organization Technical Competence Market Access Financial Condition Marketing Philosophy Location Making the Choice • Matches – Knowledge – Personalities – Personnel – Philosophies – Reputation – Results Broker Compensation • • • • Commissions Fee Based Combined Commission & Fee Incentive / Bonus Plans Note: Under any broker compensation plan, services provided must be clearly specified and detailed Examples: Insurance negotiations & placement, policy service, safety inspections, loss control, claim support and risk management consultation Working With A Broker Todd Marumoto Director Mattel, Inc. Ethics • • • • • • • Code of Mutual Appropriate Conduct Honesty Integrity Good Judgment Full & Total Disclosure Objectivity, Due Diligence, Professional Care Privacy, Confidentiality Ethics • • • • • • Ethical and Courteous Behavior Avoid Real or Perceived Conflicts of Interest Be Forthright and Realistic Know Your Opportunity Partner (Broker) Written, Clear Expectations and Standards Discuss Philosophy of Contingent Commissions • Report and Correct Issues Administration • Contract – Key Points • Service Agreement – Key Points • Communication – Elements of Good Communication • Other Services – Actuarial Support – Captive Feasibility Studies – Contract Review & Support • Claims Services Claims – Adjusting – Audits – Analysis • Team Approach – Communication and Trust – Partnership • Issues to Consider When Evaluating Broker Claims Services – – – – Industry Knowledge Qualifications, Specialties and Level of Expertise Familiarity with Carriers and TPAs Availability Loss Control • Purchasing Loss Control Services – Determine Need, Criteria & Cost – Identify Candidates – Maximize Resources • Loss Control Projects – – – – Disaster Recovery Business Continuity Claims Analysis Property and Casualty • Issues to Consider when Evaluating Broker Loss Control Services – Industry Knowledge – Qualifications, Specialties and Levels of Expertise – Knowledge of Insurance Company Resources, Reputations Market Capabilities and Working With A Broker (More Details……) Hal Larson Risk Manager Muscatine Foods Corporation Types of Risk Financing • Traditional Insurance – Installment Payments – Premium Financing • • • • Self Insurance Risk Retention Programs Purchasing Groups Captives Risk Financing Techniques Broker Services • • • • • Actuarial Feasibility Studies Implementation Plans Program Management Compare to Traditional or Self Insurance * Involve your CFO Captives Considerations • • • • • Coverage(s) Financial Goals Legal Environment & Domicile Taxation and Repatriation of Profits Start up and Continuation Costs – Capitalization, Management, Accounting, Auditing, Reinsurance, Legal, Fronting Fees, Claims Services, Loss Control Setting Expectations • Setting Expectations – Mutually Agreed – Term of Engagement – Compensation – Confidentiality Agreements – Conflict of Interest Agreement – Record and Data Retention and Ownership – Service Team Responsibilities and Timelines Setting Expectations (cont.) • • • • Clear - Written Expectations Periodic Performance Status Adjustments and Corrections As Needed Conduct a Contract Ending Assessment Performance Expectations Details • • • • • • • • Identify Relationships Review Performance Guidelines Prioritize Expectations Determine Performance Elements Determine Performance Metrics Reach Agreement Document in Writing Continually Evaluate Performance Performance Measurements • RIMS QIP (Quality Improvement Process) – Template Driven Guidelines • rims.org – Resources – Quality Program • Quality Partnership Builder (QPB) – Soon to be released revision • Broker Forms • Other Industry Forms • Company Specific *Word format samples in book & on CD Terminating A Relationship • Due Diligence – Failure to Resolve Conflicts & Dissatisfactions – Periodic Competitive Assessment of Services – Regulatory Requirements • No Surprises • Direct Detailed and Timely Notice • Conduct an Exit Conference Termination – Timing Considerations • Broker Service Agreement • Policy Terms • Broker Remuneration – Minimum Commissions or Fees – Remaining Old and New Fees • Other Services – Safety, Loss Control, Claims, RMIS, Professional, etc. Termination – Points of Caution • • • • New Brokers Access to Carrier(s) Certificates of Insurance Auto Insurance ID Cards Special Services * Buyer must conduct this termination in a professional and ethical manner to avoid emotional and non-professional behaviors. International Broker Considerations • • • • Same as Your US Broker Multiple by Country Broker’s Offices and Size Partnerships and Affiliations – Assurex Global, Globex International etc. • Product Line or Industry Expertise • Accessibility and Communication • Local Banking Contacts and Relationships International Broker Services • • • • • • Local Representation – Customs, Regulations Domiciled Policy Requirements Premium Payments Accounting Services Safety and Risk Engineering Claims Services Questions?? • The Selection Process – Gordon Adams, Tri Marine Int. – – – – Identifying Broker Candidates Selection Criteria Invitations to Bid Broker Compensation • Working With a Broker – Todd Marumoto, Mattel, Inc. – – – – Ethics Administration Claims Loss Control • Working With a Broker (more details) – Hal Larson, Muscatine Foods Corporation – – – – Risk Financing Techniques and Alternatives Setting Performance Expectations Terminating a Broker Relationship International Insurance Brokers Welcome to RIMS 2012 Annual Conference & Exhibition PLEASE POST THIS INFORMATION ON THE LAST SLIDE. AS PART OF RIMS GREEN INITIATIVES, THERE ARE NO PRINTED HANDOUTS. VISIT WWW.RIMS.ORG/2012HANDOUTS TO DOWNLOAD AVAILABLE HANDOUTS. PRINT ON DEMAND STATIONS ARE AVAILABLE ON LEVEL 1 LOBBY: BROAD & 13TH STREET BLDG.; 12 & 13TH STREET BLDG. OF THE PENNSYLVANIA CONVENTION CENTER, AS WELL AS RIMS CYBER STATIONS LOCATED IN BOOTHS #431 AND #2431 IN THE EXHIBIT HALL.