Reinsurance Broker Selection Criteria: RFP Framework

Reinsurance Broker Selection Criteria: An RFP Framework for Cedents

Last reviewed: November 2026

Reinsurance broker selection criteria are the factors a cedent uses to choose and evaluate the broker that designs, places and services its reinsurance programme. The core criteria are market access, analytics, claims advocacy, security analysis, remuneration transparency, service quality, contract certainty and data capability.

The broker shapes the structure you buy, the reinsurers you meet and the speed at which recoveries arrive. Yet many cedents choose or retain a broker on relationship and habit rather than on evidence.

This guide is for heads of reinsurance, CFOs, CROs and procurement leads at insurers. It sets out an RFP framework, a weighted scoring example and the governance points that make the decision defensible to the board.

Key Takeaways

• Reinsurance broker selection criteria should be agreed, weighted and documented before any proposal is opened.
• Remuneration must be assessed on a total-cost basis, including every income stream linked to the programme.
• Analytics and claims advocacy often matter more to outcomes than headline market access.
• Weights decide winners, so test how sensitive the ranking is before announcing a decision.
• Pass/fail knock-out criteria for authorisation, cover, client money and sanctions should be applied first.
• The cedent should hold its own treaty and settlement records, so it can judge the broker's performance independently.

What Are Reinsurance Broker Selection Criteria?

Reinsurance broker selection criteria are the measurable factors used to compare brokers in a tender and to review the incumbent between tenders. They translate what the cedent needs from its reinsurance programme into questions a broker must answer with evidence.

Good criteria are specific to the cedent. A start-up writing catastrophe-exposed property needs different strengths from a mature life insurer buying quota share and longevity cover.

The criteria should also reflect the cedent's overall reinsurance buying objectives. If the board has not defined those, start there, as discussed in our article on why CFOs and CROs need one view of reinsurance buying.

When Should a Cedent Run a Broker RFP?

A cedent should run a broker RFP on a planned cycle and whenever its needs change materially. Typical triggers include:

• A planned review cycle, often every three to five years
• A significant change in strategy, such as new lines, new regions or a large acquisition
• A sustained service failure, such as late placements, disputed recoveries or unsettled wordings
• A broker merger, team departure or change in the broker's ownership
• A move to new structures, such as aggregate covers, capital market capacity or multi-year deals
• A board or audit committee request to test cost and value

A tender is not always the right answer. A structured review of the incumbent against the same criteria may achieve the same discipline with less disruption.

What Criteria Should the RFP Score?

The RFP should score eight core areas, each backed by evidence rather than claims. The table below sets out what to ask and what to request.

Ask each broker to complete the same response template. Free-form proposals make comparison harder and reward presentation over substance.

How Should Remuneration and Conflicts Be Assessed?

Remuneration should be assessed as total broker income linked to the programme, not just the brokerage rate on the slip. Conflicts arise when broker income depends on which reinsurers are used or how premium moves.

Common income streams include:

• Brokerage: a percentage of reinsurance premium, usually deducted before premium reaches reinsurers.
• Fees: a fixed or variable fee agreed directly with the cedent, sometimes replacing brokerage.
• Income from reinsurers: payments for services, facilities or volume-related arrangements, where permitted.
• Investment income: interest earned on premiums and claims held in transit, depending on the money-handling terms.

Request a written disclosure of each stream, with an annual statement of actual earnings from your programme. Compare proposals on total expected cost, not on the headline rate.

The UK FCA examined conflicts of interest in its wholesale insurance broker market study, published in February 2019. It concluded there was room for improvement but did not find evidence of significant harm that warranted intrusive remedies, which leaves cedents responsible for testing remuneration themselves.

How Does a Weighted Scoring Matrix Work in Practice?

A weighted scoring matrix multiplies each broker's score on each criterion by the criterion's weight, then adds the results. The example below shows both the method and why weights must be fixed before scoring.

Worked Example: Three Brokers, One Decision

The illustration below is simplified and hypothetical. Each broker is scored from 1 (weak) to 5 (excellent), and weighted points are calculated as weight × score ÷ 5, so the maximum total is 100.

Base case weights:

Broker B wins with 81, followed by Broker C on 78 and Broker A on 74. Broker A has the strongest market access but loses ground on remuneration transparency and wording discipline.

Sensitivity test: now raise market access to 30 and cut remuneration to 5, leaving everything else unchanged.

Broker B still wins, but only by one point. Broker A and Broker C swap places entirely.

The lesson for cedents: the weights are a strategic decision, not an administrative one. Agree them with the board or reinsurance committee before proposals arrive, and record the reasons.

The lesson for the evaluation panel: always run a sensitivity test before announcing a result. If a small change in weights changes the winner, the decision rests on judgement, and the paper trail should say so.

Single Broker, Co-Brokers or Split Mandates?

The right mandate structure depends on programme size, complexity and how much competition the cedent wants between brokers. The table below maps common situations to the structure that usually fits.

Split mandates bring competition but also risk. Someone must still own the view of the whole programme, including how covers interact.

Which Broker Selection Mistakes Cost Cedents?

Seven mistakes appear repeatedly in broker selection. Each one either hides cost or weakens the cedent's control of its own programme.

How Should You Run the RFP Process?

A broker RFP should run on a clear timetable that ends well before the renewal season starts. Changing broker in the middle of a renewal adds risk the cedent does not need.

Knock-out tests should be pass/fail rather than scored. A broker without adequate cover or sanctions controls should not be rescued by a strong pitch.

Sanctions controls deserve particular attention, because a valid claim can still become unpayable. Our article on sanctions screening for reinsurance explains why.

What Regulatory and Governance Points Apply?

Regulators hold the cedent, not the broker, responsible for managing its reinsurance programme. Broker selection is therefore part of the cedent's own governance.

Supervisory Expectations

The IAIS Insurance Core Principle 13 expects ceding insurers to have procedures for identifying reinsurers that meet their security requirements. It lists reinsurance brokers' security criteria as one possible input, alongside the cedent's own view of each reinsurer.

That makes the broker's security analysis a legitimate selection criterion. It does not allow the cedent to outsource the judgement entirely.

Distribution Regulation

In the EU, the Insurance Distribution Directive applies in principle to reinsurance distribution as well as insurance distribution. Cedents should confirm that a broker is properly registered or authorised in each jurisdiction where it will act for them.

In the UK, the FCA regulates insurance and reinsurance brokers. For programmes that use Lloyd's capacity, confirm that the broker holds current Lloyd's accreditation.

Counterparty and Money-Handling Risk

Premiums and claims often pass through the broker's accounts. The terms of business should state whether the broker holds money as agent of the cedent or of reinsurers, because that decides who bears the risk if the broker fails.

Settlement speed also affects receivables. Our article on reinsurance receivables ageing covers what finance should track.

What Does the Market Look Like for 2027 Renewals?

With reinsurance capacity more available than at the 2023 peak, cedents have more leverage to ask brokers for structure innovation, better analytics and lower total cost. Brokers compete harder for mandates in softer markets.

At the same time, programmes have become more complex. Aggregate covers, multi-year structures, capital markets capacity and stricter wording expectations all increase the value of a broker with genuine technical depth.

That combination favours a disciplined RFP. Cedents can secure more value, but only if they know exactly what they are asking for and how they will measure it.

Checklist for Heads of Reinsurance and CFOs

Use this checklist before you launch or conclude a broker RFP.

• Reinsurance objectives, criteria and weights are approved before proposals are issued
• Knock-out tests cover authorisation, PI cover, money handling, sanctions and conflicts
• Every broker completes the same template and a sample analysis on your data
• Remuneration is compared on total expected cost, with all income streams disclosed
• The named service team and succession plan are written into the mandate
• A sensitivity test shows whether small weight changes alter the result
• The SLA sets targets for placement, wordings, accounts and claims collection
• Treaty terms, accounts and recoveries are held in the cedent's own controlled system

For the last point, bordereaux reconciliation lets the cedent allocate premiums and claims across reinsurer shares and check them against its own records, whichever broker it uses.

Key Terms

Broker RFP: A request for proposal that invites brokers to bid for a cedent's reinsurance mandate against defined criteria.

Brokerage: Broker remuneration calculated as a percentage of reinsurance premium, usually deducted before premium reaches reinsurers.

Fee basis: Broker remuneration agreed directly with the cedent, independent of premium volume.

Co-broker: A second broker appointed alongside a lead broker to extend market access or add specialist skills.

Knock-out criteria: Pass/fail tests, such as authorisation or professional indemnity cover, applied before any scoring.

Weighted scoring matrix: A table that multiplies each criterion score by its weight to produce a comparable total.

Security committee: A broker or cedent committee that assesses and approves reinsurers' financial strength for use on programmes.

Terms of business agreement (TOBA): The contract between the cedent and broker setting out services, remuneration and money-handling arrangements.

Sources

• FCA MS17/2: Wholesale Insurance Broker Market Study
• IAIS Insurance Core Principle 13: Reinsurance and Other Forms of Risk Transfer
• Directive (EU) 2016/97 (Insurance Distribution Directive)