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MBIE seeks panel of risk financing and insurance intermediary service providers for $130m of annual government business

Business
MBIE seeks panel of risk financing and insurance intermediary service providers for $130m of annual government business
<a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

By Gareth Vaughan

The Ministry of Business, Innovation & Employment (MBIE) is seeking a panel of risk financing and insurance intermediary service providers for government agencies that spend about $130 million a year on insurance premiums.

MBIE has issued a Request for Proposal (RFP) for All-of-Government risk financing and insurance intermediary services. MBIE wants to establish a panel of risk financing and insurance intermediaries to source and manage risk financing and insurance for clusters of government agencies. Proposals from consortia will be considered.

Interest.co.nz reported in our subscriber email in March that MBIE was considering centralising the Government's risk financing and insurance strategies. And we reported last month that an RFP was coming this month.

Successful applicants will be required to help government agencies develop an understanding of their risk profiles both in an individual and collaborative basis, advise government agencies on their insurable risk profiles again both in an individual and collaborative capacity, develop effective collaborative insurance centric risk financing products and services to manage government agencies’ risk profiles, accessing the insurance market directly to source collaborative risk financing/insurance products for government agencies, and assist MBIE in its role as All-of-Government contract manager.

Although there's already some areas of collaboration in the procurement of insurance by government agencies, MBIE wants more. MBIE says greater centralisation of government agencies' risk financing and insurance needs will reduce costs, spread risk and provide greater leverage in a world that has been dramatically changed after the Canterbury earthquakes, with volatile premium swings, higher excesses and more restrictive policy terms and conditions.

"The estimated annual premium spend across the Public Service, State Services and State Sector is $280 million," MBIE says. "Those agencies within the scope of this Request for Proposal account for circa $130 million in annual premium spend."

All-of-Government contracts are mandatory for public service departments, the Defence Force and Police. All government agencies that are part of the State Sector and the Public Sector are eligible to participate. MBIE points out the Public Sector usually has insurance covering material damage, business interruption, public liability, professional indemnity, motor vehicles, contract works, travel, directors and officers liability, and personal accidents.

The closing date for submissions of proposals is November 28, with the contract to be awarded in May next year.

The RFP is stage one of the process, MBIE says, with it establishing a closed panel of intermediaries to service government agencies. Stage two in the middle of 2015 will then involve a secondary procurement process to obtain supply of risk financing and insurance related services from the panel of intermediaries for clusters of government agencies. These clusters are under development after a data collection exercise across government.

"Once the panel is set up, MBIE will release sequential, closed Requests for Proposals to panel providers seeking their services and solutions for clusters of agencies. The successful intermediary will then source appropriate insurance options for the agency cluster. Clusters will have complementary risk profiles and appetites developed from agency insurance data," says MBIE.

This story was first published in our email for paying subscribers early on Thursday morning. See here for more details and how to subscribe.

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