Getting tender ready

More capacity is returning to the insurance market but, as Helen Povah, Public Sector Client Management Director at Aon, explains, preparation is key to achieving the best results from a tender.

It’s encouraging to see more stability in the insurance market during this August’s renewal season. But, with underwriters still cautious, starting early and having all the relevant information to hand will help you secure the best possible terms and rates in a tender.

This approach is particularly important in the higher education sector where many long term agreements are due to expire in 2025. These have offered some shelter during the volatility of the past few years but institutions must be ready to have their risk profiles come under intense scrutiny when these agreements come to an end. These are our tips to get the best results from a tender:

Start early

It’s essential to allow enough time to run the tender and collate all the information to support it. As well as giving insurers a better view of the risk your organisation presents, this can save time during the tender process. Over the past few years, we’ve seen an increase in the volume of clarifications requested by insurers: supplying that information at the outset will help to avoid this. We recommend allocating at least three months to collect the information and answer any questions from insurers and therefore starting as much as eight months out from renewal if you’re carrying out a multi-lot insurance tender. Additionally, make sure you have assigned adequate resources to obtain the necessary information from colleagues, departments and, where necessary, external sources.

Be mindful of the different routes to market

Weigh up the pros and cons of each of the different routes to market. Your choice may be determined by the cover you wish to procure, for example we have found that some policies, such as high risk buildings or niche covers, may be better served outside the tender process. We have also found that a formal tender for some lines of business, in particular property insurance, may not yield as much interest and/or capacity as in previous years. To encourage more competition, and to enable more transparent discussions around scheduling or layering to fill capacity, a commercial rebroking exercise may be more appropriate.

Be aware of the new procurement regulations

The Procurement Act 2023 comes into effect on 24 February 2025. Designed to cut red tape, improve transparency, and open up competition, the new regulations also mean some important changes to the tender process. Under the new rules, organisations will be required to publish more information. This includes notices throughout the tender process but also annually around performance and service-related matters. Meeting these new requirements may mean factoring in additional time and resources.

Moving from MEAT to MAT

Another key change under the new procurement regulations is the shift from ‘most economically advantageous tender’ to ‘most advantageous tender’. This gives organisations the freedom to prioritise other criteria, such as environmental credentials or social and governance standards, during the tender process.

Collate relevant information for tender

Providing as much information as possible to support your tender will calm the nerves of even the most cautious underwriter as well as reducing the likelihood of a stream of requests for clarifications during the tender process. Ensuring that details such as full location addresses and postcodes, vehicles lists and business descriptions are up-to-date is essential but also provide as much information as possible relating to risk. As examples we recommend the following:

Construction, occupancy, protection, exposure (COPE) information for all buildings
Accurate declared values for property – it may be sensible to obtain up-to-date property valuations to support these. If you have not undertaken any professional valuations in the past three years, we would strongly recommend obtaining a professional valuation for the portfolio of buildings you need to insure, given the volatility around inflation that has affected the construction industry.
Information on policies and procedures for dealing with student complaints
Health and safety systems and policies
Inspection regime information
Business continuity plans

It may also be prudent to commission an independent underwriting risk survey to present your risk to market in the best possible way. This details the risk exposure and any risk management strategies to demonstrate that the organisation is taking a responsible approach.

Consider your evaluation criteria

Price is an important consideration but it’s rarely the only factor to weigh up when comparing tender responses. Other important criteria could include quality of service, innovation, and a number of other services that insurers may offer. The way an insurer will work with you on a day-to-day basis, or their approach to reducing the total cost of risk, can make a significant difference to the relationship and the value your institution gains from the contract.

Work with an insurance broker

Engaging an insurance broker will give you the benefits of their experience and expertise. As well as understanding the market, which insurers to target and the information you need to collate to support a tender, they will be able to help you present your institution’s risk in the best possible way. This can save you time during the tender process but will also help you secure the best results.

More information

At Aon, we have considerable experience of helping higher education institutions with their insurance tenders. Speak to your account manager or contact Helen Povah ([email protected]) to find out how we can help you.

Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues in over 120 countries provide our clients with the clarity and confidence to make better risk and people decisions that protect and grow their businesses.

The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information and use sources that we consider to be reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

This article has been compiled using information available to us up to 21/10/2024.

Aon UK Limited is authorised and regulated by the Financial Conduct Authority. Aon UK Limited is registered in England and Wales. Registered number: 00210725. Registered Office: The Aon Centre, The Leadenhall Building, 122 Leadenhall Street, London EC3V 4AN. Tel: 020 7623 5500