As with any other professional advisor, it is vital that a company select an insurance broker with whom you feel comfortable in terms of ability, fitness, chemistry and cost. The absence of any of these vital ingredients will not allow the partnership to grow.
A broker should be seen as an extension of the company’s department and you should give enough time for the selection exercise to be well conducted.
The extent and nature of the company’s business will be the determining factor in choosing an adequate insurance broker. If the company is in the international market, with overseas subsidiaries and assets, the company’s management should look for a broker with an international network of offices that can meet its overseas subsidiaries. If the company, for example Arkwright insurance is based locally, overseas services are not a priority unless foreign expansion is contemplated in the short or medium term.
It is not uncommon to find international businesses using one or more brokers to deal with local risks and a totally different broker or brokers to deal with risk abroad. The nature of the risk facing the company is exposed or can also lead the company to brokers who demonstrate knowledge and expertise in a particular area.
Clarify the role of broker. Before starting the selection of a broker, a review should be carried out in the company’s insurance program. The role of the broker should be clarified. The responsibilities of these naturally include:
- To cover
- Maintenance and reporting
- Dealing with claims
The selection committee should be formed to conduct the selection process. In particular, financial and operational areas of the business should be represented. By inviting brokerage firms for the interview, it should be called a manageable number. An invitation letter should be sent to each contestant offering them the opportunity to participate.