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Background
Procurement Australia was engaged by one of Australia’s largest independent school groups to review its insurance program and long-standing broker arrangements.
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With roots dating back to the late 1800s, the organisation manages a network of over 50 schools and educational facilities across Australia, supporting over 40,000 students.
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As a large education provider comprising schools and early learning centres, the client is exposed to a broad range of operational, safety, financial, reputational, and physical risks, particularly in relation to natural catastrophe and weather-related events given its scale and geographic footprint.
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The existing broker relationship had been in place for over 20 years and had never been formally tested. As part of a broader governance initiative, the member schools sought to better understand whether their current arrangements remained competitive; not only from a cost perspective, but also in terms of coverage, structure, and service.
Approach
To support this, Procurement Australia designed and managed a structured, independent broker tender process. Five brokers with strong education sector experience were invited to participate.
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The process was deliberately designed to go beyond a simple pricing exercise. It assessed each broker’s qualifications and servicing capabilities across key areas, including (but not limited to):
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Industry experience and sector expertise
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Claims management approach and service model
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Risk management capabilities and recommended initiatives
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Nominated service personnel and specialist resources
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Technical proficiency and program understanding
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Renewal and marketing strategy, including insurer engagement
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Digital platforms, analytics, and reporting capabilities.
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This provided the client with a clear and structured evaluation framework, enabling all submissions to be assessed on a like-for-like basis in a transparent and consistent manner.
Solution
The tender process created strong competition among the participating brokers, resulting in a materially improved outcome for the client.
Key Outcomes
Broader and more tailored coverage aligned to the organisation's risk profile.
Annual premium savings of more than $6.7 million (44%) despite a considerable uplift in their insured assets and property values.
A more effective program structure the optimised the use of the client's capital.
Clear broker service commitments, including agreed key performance indicators to support ongoing accountability and performance standards.
Impact
Beyond the immediate financial savings, the process provided the client with greater confidence in how its insurance program is structured and managed going forward.
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It also reinforced the value of periodically testing the market, particularly where long-standing arrangements are in place, to ensure the organisation was making the best use of its insurance capital and coverage was aligned with the organisation’s evolving needs.