For mid-market risk managers, assessing the total value of their relationship with their property/casualty insurance broker is a calculation that encompasses far more than the cost of coverage purchased.

While quantitative, insurance-oriented metrics such as program costs, coverage components and exclusions, sublimits, deductibles and retentions typically are at the forefront of most risk managers' evaluations of their property/casualty broker's performance, experts say risk managers seeking a more comprehensive view of the services they receive are including qualitative measurements based on their specific risk management needs.

“Think of your broker as a professional service provider as opposed to simply a transactional service provider,” said Richard S. Betterley, president of Sterling, Mass.-based Betterley Risk Consultants Inc.

Qualitative reviews are slowly gaining in popularity among mid-market risk managers, experts say, particularly as more midsize firms tap their brokers to provide supplemental, industry-specific services such as risk modeling and data analytics, actuarial services and preventive risk mitigation advice.

“Midsized corporations can't afford the large payrolls they would need to hire in-house experts in a lot of these fields,” said Daniel Sielicki, director of risk management at Monroe, Ohio-based Baker Concrete Construction Inc. “We're all pinched budgetwise ... so we've got to look to the outside for someone who can deliver that robust expertise at a reasonable price.”

When York, Pa.-based Wagman Cos. Inc. was shopping for a new property/casualty broker in 2010, the construction firm's request for proposals included qualitative selection criteria, including candidates' ability to provide guidance on insurance and indemnity clauses in its project contracts, assistance with the internal allocation of premiums, loss-control advice, perspectives on relevant insurance market developments and estimates of future experience modifiers.

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Edwin Jackson, vice president and general counsel at Wagman Cos., said that while the company does not necessarily evaluate its broker's services based on hard-and-fast “metrics,” it does conduct annual stewardship meetings during which its broker reports its activities and accomplishments based on objectives established at the beginning of the year.

“Much of my evaluation of our broker's performance is admittedly more subjective than objective,” Mr. Jackson said. “Timely and helpful responses to our frequent questions and assignments” are most important, he said.

For guidance on expanding the services they demand from their brokers and developing evaluative processes to gauge the effectiveness of those services, experts said mid-market risk managers can look to their counterparts at larger, more risk-sophisticated firms.

Stephen Truono, vice president of global risk management and insurance at Stamford, Conn.-based Starwood Hotels & Resorts Worldwide Inc., said aside from quantitative risk transfer metrics, his annual broker evaluations emphasize qualitative performance in areas such as thought leadership and industry expertise.

“I'm looking for my brokers to come to the table with ideas and suggestions in addition to those generated by my own team,” Mr. Truono said. “If I get the sense that my broker is barely a page ahead of us in terms of identifying and managing our risks, that's when I get concerned. As a risk manager, I need to be a jack-of-all-trades, and it's essential that my brokers are experts in their respective disciplines.”

Debbie Gramer, director of risk management at the Inverness, Colo.-based Arrow Electronics Inc., said she found most brokers “fairly equal in terms of capabilities, price and offerings” during the electronic components distributors' recent search for a new broker.

Aside from industry knowledge, “the distinguishing feature ... was who understood our business, knew our priorities and strategies, and focused on what could bring our shareholders value,” she said. “Since our internal resources are lean, we needed a true risk management adviser” to navigate complex global exposures and identify risk opportunities.