What is an RFP in Insurance?

An RFP in insurance is a formal request a buyer uses to invite insurers or brokers to propose solutions for coverage and services. It explains what the organization needs, how proposals will be judged, and when decisions will be made. The goal is to compare options fairly and select the partner that delivers the best total value, not just the lowest premium.
At RFP Planet, we regularly see organizations use this process to bring more structure and transparency to vendor selection.
A clear insurance RFP usually includes a company overview, current policies, loss history, eligibility or headcount data, service expectations, compliance requirements, and a timeline with evaluation criteria. Vendors respond with coverage terms, pricing, service plans, and proof of experience such as references and case results.
Companies use an RFP when renewing or replacing health benefits, property and casualty programs, cyber coverage, or when choosing a new broker of record. It is also useful when adding a new line of insurance or when growth has changed risk exposure and service needs.
In such cases, businesses often explore Health Services or Cyber Security Services through structured RFPs.

Understanding Insurance RFPs

Definition of an Insurance RFP

An insurance RFP, or Request for Proposal, is a structured document organizations use when they are seeking new coverage or broker services. It outlines the type of insurance needed, service expectations, and evaluation criteria so insurers or brokers can prepare detailed proposals. This format helps both sides work from the same information and makes comparison more straightforward.

Why Insurance Companies Use RFPs

Insurance companies and buyers turn to RFPs to create a fair, competitive process. Instead of relying on informal quotes, an RFP ensures that each vendor responds to the same set of requirements. This allows companies to evaluate cost, coverage options, service levels, and compliance side by side. For insurers, it’s a chance to demonstrate value beyond price, such as risk management tools, claims support, or technology.

For example, vendors offering Records and Document Storage Services often highlight compliance and security benefits in their proposals.

Key Stakeholders Involved in the Process

An insurance RFP usually involves multiple people. On the buyer’s side, human resources, finance, and risk managers often take the lead in drafting the request. Senior leadership may review the final decision. On the vendor side, brokers, carriers, underwriters, and account managers contribute by preparing proposals and answering questions. Involving the right stakeholders ensures that the chosen solution fits both business needs and budget priorities.

The Insurance RFP Process

Preparation and Planning

The process begins with gathering all the necessary information. Companies review their current policies, claims history, and coverage gaps. They also identify goals, such as lowering costs, improving employee benefits, or expanding coverage. Good preparation sets clear expectations and avoids confusion later.

Drafting and Structuring the RFP

Once objectives are clear, the RFP document is created. It typically includes company background, insurance needs, service requirements, budget guidelines, and timelines. A well-structured RFP gives vendors the details they need to prepare accurate and relevant proposals.

Distributing to Brokers and Carriers

The RFP is then shared with selected brokers or insurance carriers. Some companies invite a wide group, while others limit the process to a few trusted vendors. Distribution ensures that multiple options are available for comparison, creating healthy competition.

Evaluating Responses

After receiving proposals, the company reviews them against set criteria. This often includes pricing, coverage terms, service features, technology tools, and vendor experience. Scoring methods or comparison tables are used to keep the evaluation fair and organized.

Here, Case Management Services are sometimes evaluated for employee benefit programs or claims support.

Selecting the Right Insurance Partner

The best partner is not always the lowest-cost option. Companies look for a proposal that balances affordability with comprehensive coverage and reliable service. Reference checks and finalist interviews often help confirm the decision.

Onboarding and Implementation After Selection

Once a vendor is chosen, the onboarding process begins. This includes finalizing contracts, setting up systems, and training staff on claims or support processes. A smooth implementation ensures the organization sees the benefits of its new insurance partner quickly.

Benefits of Using an Insurance RFP

Getting Competitive Quotes

An RFP encourages insurers and brokers to compete for the business. Since all vendors receive the same requirements, they provide detailed quotes that can be compared side by side. This competition often leads to better pricing and stronger service offers.

Improving Transparency in Decision-Making

By using a structured document, companies create a clear and fair selection process. Each proposal is judged against the same criteria, which reduces bias and guesswork. This transparency builds confidence in the final decision for both leadership and employees.

Identifying Added Value Beyond Price

An RFP is not only about cost. It reveals what else vendors bring to the table, such as technology platforms, risk management programs, or claims support. These extras can make a big difference in the long-term effectiveness of an insurance program.

Staying Compliant with Regulations

Many organizations, especially in regulated industries, are required to show a fair and documented vendor selection process. An RFP creates a clear audit trail that demonstrates compliance with internal policies and external regulations.

Long-Term Savings and Risk Management

The process helps companies find partners who don’t just deliver short-term savings but also manage risks effectively over time. By choosing a vendor with strong expertise, organizations can reduce claims, avoid costly coverage gaps, and build more predictable insurance costs in the future.

Common Challenges and How to Overcome Them

Time Management in the RFP Process

Managing an RFP takes time, from preparing documents to reviewing responses. If deadlines are rushed, important details can be overlooked. Starting early and setting a clear schedule for each stage helps avoid last-minute pressure.

Managing and Organizing Information

RFPs often involve complex data like claims records, policy documents, and vendor proposals. Without structure, the process can feel unmanageable. Using standardized formats and central storage systems makes comparison easier and keeps information clear.

Accessing the Right Market and Carriers

Some companies only receive limited proposals because they are not reaching the right insurers or brokers. This limits choice and weakens competition. Working with experienced intermediaries or expanding the distribution list helps ensure stronger responses.

Balancing Cost with Coverage Quality

Focusing only on the lowest price can lead to weak coverage and higher risks later. The better approach is to weigh both cost and quality. Scoring methods that include service, claims support, and coverage terms alongside pricing encourage balanced decisions.

Avoiding Vague Requirements That Confuse Vendors

If an RFP is unclear, vendors may provide generic or incomplete responses. This wastes time and creates confusion during evaluation. Writing precise requirements and outlining expectations from the start ensures vendors deliver proposals that match business needs.

Types of Insurance RFPs

Health Insurance RFPs

These are used when companies want to secure or renew medical, dental, or vision plans for employees. A health insurance RFP typically asks vendors to propose plan designs, premiums, provider networks, and wellness programs. It helps organizations compare options and choose coverage that balances cost and care quality.

Property and Casualty Insurance RFPs

Property and casualty RFPs focus on protecting business assets, operations, and liability risks. They may cover buildings, equipment, vehicles, or general liability. By issuing an RFP, companies can evaluate carriers on coverage terms, exclusions, claims support, and pricing to ensure proper protection for physical and legal risks.Learn more about Property & Casualty Insurance

Learn more through Real Estate and Brokerage Services which often overlap with property insurance requirements.

Employee Benefits RFPs

Beyond health coverage, businesses often issue RFPs for broader benefit programs. These can include retirement plans, disability insurance, or voluntary benefits. An RFP allows companies to see how different vendors structure benefit packages, communicate with employees, and support long-term engagement.

Specialty Insurance RFPs

Specialty insurance addresses unique or high-risk exposures, such as cyber liability, marine coverage, or professional liability. An RFP in this area ensures vendors understand the specialized risks and can provide tailored solutions. This approach helps organizations secure policies that address their specific challenges effectively.

Best Practices for Writing an Effective Insurance RFP

Define Clear Goals and Requirements

Every strong RFP starts with clarity. Companies should explain why they are issuing the RFP and what they want to achieve. Clear goals and well-defined requirements help vendors design proposals that directly address the organization’s needs.

Provide Complete and Accurate Data

Vendors can only give precise quotes when they have full information. Sharing data such as claims history, employee counts, and current coverage details ensures proposals are accurate. Incomplete data often leads to delays or misleading comparisons.

Ask the Right Questions to Vendors

An effective RFP goes beyond price by asking vendors how they will deliver value. Questions might cover claims handling, customer support, technology tools, or risk management programs. This gives a fuller picture of what each vendor can offer.

Set Realistic Timelines for Responses

Vendors need adequate time to prepare thoughtful proposals. Rushed deadlines may result in incomplete or low-quality responses. Allowing a reasonable window for submissions encourages better participation and stronger proposals.

Use Scoring Methods to Compare Proposals

Once responses are received, companies should use scoring methods to evaluate them fairly. Weighting factors such as coverage, service, technology, and price ensures decisions are based on value, not just cost. This structured approach makes the selection process more transparent and defensible.

Conclusion

By using RFPs, businesses of all sizes can secure competitive pricing, evaluate added value, and build stronger partnerships. Taking the time to issue a well-prepared RFP leads to smarter insurance decisions and better long-term protection. For guidance on creating one, visit our contact page.