How often should a company put its insurance business up for competitive bids? Shop around too frequently and you risk undermining your credibility as a prospective long-term customer; too seldom and you risk paying more for insurance coverage than you would if you'd just looked a little harder.

Ivor Bamberger, chief financial officer of Beber Silverstein & Partners Advertising, a Coral Gables, Fla., ad agency, keeps his policy costs under control without alienating insurance carriers, by going to market for insurance bids every three years. Working through an insurance broker, Bamberger solicits quotes from at least five carriers.

"Anything less might give us a distorted view of what the marketplace has to offer," he warns. "If you just take two or three bids, insurance brokers won't thoroughly scan the market for you -- they will just bring you quotes from the carriers they do the most business with. Requiring five or more forces them to broaden the search." Using that technique as part of his insurance-management strategy, he has been able to keep his health-insurance costs from skyrocketing. Increases have been held to less than 12% a year.

Besides looking for competitive prices, Bamberger also requires brokers to evaluate the financial health of prospective carriers. "We want to make certain our bids come from well-established insurers who are going to be around to fulfill the terms of their contracts with us," he says.

-- Jill Andresky Fraser

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