Does it make sense for medium-sized companies to question or benchmark their long-term broker? How do broker tenders help to improve insurance coverage and save money at the same time? And how do broker tenders work?
In an interview, Richard Mayer, spokesman for the Blumenbecker Group’s management since the beginning of 2019, explains how he improved his company’s insurance cover with little effort by issuing a broker tender. The international service provider for trade and industry, with around 1,300 employees in nine countries, generates annual sales of over 200 million euros.
What was the occasion for Blumenbecker to take a closer look at his insurance policies?
After I joined the management, it was planned to put the existing insurance broker to the test in a tender. Especially since the legislator expects company managers to be able to fully understand and manage their company’s insurance cover.
Last year, we launched a purchasing project with Kloepfel Consulting in various divisions of the company. When we found out that our service provider also handles broker tenders, it was clear that we would make use of this service. On the one hand, the purchasing consultants had provided us with very good support in other areas. On the other hand, Kloepfel Consulting offers the broker tenders completely success based. As the result, we could only win. If they had found out that our insurance cover was faultless, our broker would have received a quality stamp from Kloepfel and we would have been assured that we were well positioned. This would even have been free of charge. The motive was not simply to reduce costs or to replace the current service provider. Rather, we wanted to create transparency through benchmarks.
What about the risk of non-transparency?
Bernd Hendges has made gaps in coverage and savings potentials transparent. The insurance cover was clearly ahead of the savings.
How long did the broker tender take?
The project duration was about eight weeks, but we only had to invest about five days in total.
Did a lot of persuasion work have to be done internally at Blumenbecker to optimise the insurance programme?
No. The Kloepfel Consulting project team convinced us right from the start and the cooperation was highly professional and transparent from the first day until the end of the project.
What was used to measure how well Blumenbecker is protected?
Bernd Hendges worked out our risk profile and our service requirements with us in a risk dialogue. He then analysed our insurance programme. To this end, the team has become deeply familiar with our products, markets and terms of delivery. In other words, they took a very close look not only at the insurance policies, but also at our contracts with suppliers and buyers.
They then analysed the risks using a traffic light system. Risk group A was serious defects, risk group B corresponded to medium defects and risk group C meant minor defects. This enabled us to identify the deficiencies that required immediate action and to see, for example, where there were gaps in insurance cover and where the sums insured were overstated.
What happened after the analysis of your insurance program?
Bernd Hendges and his team carried out an actual comparison, so that the same things could really be compared with each other. In this way we were able to see exactly what price X the existing insurance cover costs and how high the price should actually be according to the benchmark. In addition, these comparative values also allowed us to see how comparable companies on the market are insured nationally and internationally at what prices.
In addition, we were then given figures on all practical claims. Starting with liability and transport insurance to credit insurance and foreign issues. In addition, we were also provided with various insurance alternatives for the various topics.
In the end, this comparison gave us transparency about our policies and the market offer. This provided us with a solid basis for making decisions, for example, on the level of deductibles, sums insured, scope of cover or certain clauses.
How much time did Blumenbecker have to invest in the broker tender?
In fact, only five days. At first, we were interviewed as part of the risk analysis. Kloepfel then received the data on the existing insurance cover from us and the current insurance broker. Subsequently, five insurance brokers were invited to tender and briefed by the Kloepfel team. The team of consultants then carried out this tender independently and without any major queries for about four weeks with our authorisation.
The discussion of the results and presentation of the respective insurance brokers then stretched over two days. The final evaluation of the presented programs was then carried out independently by Kloepfel. Afterwards we were able to make the final decisions in just under three hours.
Blumenbecker operates in over 30 locations worldwide. Was this taken into consideration when the insurance programme was reviewed?
The Kloepfel team actually turned over every stone in all risk areas and also checked the global risks. Particularly in the international arena, one should not underestimate the country-specific requirements in the area of compliance, for example.
How were the results of the broker tender implemented?
On the one hand, the project ran until all commitments made by the selected broker were demonstrably implemented. On the other hand, the brokers for the tender were selected very well from the outset. Attention was paid to their rating and demonstrable experience with our industry as well as to their international positioning and quality. For this reason, a pre-selection process was carried out before the actual call for tenders, during which the brokers had to answer around thirty questions and provide reference customers. In order to maintain the quality of the new insurance programme at a high level in the following years, Bernd Hendges will participate in the annual meetings again and again.
Team spirit is a big part of success
It’s very important. After all, the goal of Bernd Hendges and his team was not simply to replace the service provider, but to create benchmarks and transparency so that we would have a suitable and market-leading insurance program at the end of the project. This also meant that the team had to understand us, our values and philosophy as well as the economic factors.
What would you recommend the insurance management of Kloepfel Consulting for?
On the one hand, we have received a tailor-made insurance programme and no standard products. This also included the intensive training of Bernd Hendges and his team in our company and in our products and markets. They also learned to understand our risk philosophy. This enabled them to make transparent the advantages and disadvantages as well as the costs and risks of our existing insurance programme, which are important for us and to evaluate them in our favour. The consultants were then able to convey this very well to the participating brokers in the tendering process. And finally, they optimized our insurance coverage and costs on a success basis. In fact, you can only win and after the project you get the secure feeling of being protected all around.
About the Blumenbecker Group:
Blumenbecker: We deliver answers!
The Blumenbecker Group, headquartered in Beckum, Germany, comprises more than 20 companies in the fields of automation technology, engineering, industrial trading, industrial services and technology. Around 1,300 employees at more than 30 locations in Germany, Poland, Russia, the Czech Republic, Slovakia, Ukraine, India, the USA and China (P.R.) support customers worldwide in global competition with a wide range of services from a single source.
The interview was led by Alexander Hornikel, sales manager and senior partner at Kloepfel Consulting.
Bernd Hendges, Head of Insurance Management at Kloepfel Consulting, will answer questions on the topic of broker tenders.
Activities
- Acquisition and support of companies with sales of up to 3.5 billion
- insurance due diligence
- Warrenty & Indemnity Insurance (M&A)
- Introduction of international data management systems
- Implementation of international insurance programs
- Process optimization – Claims management
- Cross-industry broker tenders
- Compliance audits
- Management of strategy, annual and renewal discussions
Contact:
Bernd Hendges
Dipl.-Betriebswirt (FH)
Head of Insurance Management
KLOEPFEL Consulting GmbH
Rundfunkplatz 2
D-80335 München
M: +49 151 64513844
T : + 49 89 21565778
b.hendges@kloepfel-consulting.com
www.kloepfel-consulting.com
