Most reserve-review RFPs fail in the same way. They ask a small set of firms to bid on an engagement described in one paragraph, they provide no data package, they do not define the deliverables, and they do not explain the program’s structure. The proposals that come back are generic, priced defensively, and not comparable to each other. The buyer ends up choosing on brand or broker relationship because the bids do not give them anything better to go on.
This article is a template for the RFP that risk managers, CFOs, and captive boards can actually send to reserve actuaries, with enough detail that the responses are comparable and the work starts on the right foot.
Who should receive your RFP
Send the RFP to three to five firms. Ten is too many; the good firms will not bid seriously on a ten-way contest. Three is the minimum to triangulate pricing.
The firms should be selected for relevant experience, not reputation. A Big Four firm that does $50M in annual actuarial work may have never seen your program type. A two-partner boutique with five captive clients and a workers compensation specialization may know your structure cold. What matters:
- Has the firm signed opinions for programs in your structure (single-parent captive, group captive, large-deductible WC, public entity pool, self-funded health)?
- Has the firm worked in your lines of business (WC, GL, auto, MPL, stop-loss, pension)?
- Does the firm have signing actuaries with 10+ years of experience in your lines?
- Does the firm have a stated approach to the items that matter: diagnostics, range construction, documentation?
Your broker will have suggestions. Treat them as one input. Also ask peer captives, attend a CICA or SIIA meeting, or ask your auditor who they see producing good work. The goal is three to five firms that could genuinely serve the program, not five firms your broker has a relationship with.
Sections the RFP should contain
A reserve review RFP should have seven sections. Anything more is padding. Anything less leaves the bidders guessing.
1. Program overview
The single most important section. Bidders price defensively when they cannot assess what they are bidding on. Give them enough that their bids reflect the actual work.
Include:
- Entity type: single-parent captive, group captive, SIR, large-deductible, self-funded health plan, public entity pool.
- Domicile: state for captives, relevant regulator.
- Lines of business and retention levels for each. If you have a $500K SIR on WC and a $1M SIR on GL, say so.
- Program history: how long self-insured, any structural changes (e.g., retention increase in accident year 2022, new captive in 2024).
- Current unpaid loss estimate and the method by which it was last set (prior actuary, name of firm if comfortable sharing).
- Number of active accident years and data history available.
- Reinsurance or stop-loss structure, high level.
- Any known issues the bidder should know about: a case reserve strengthening initiative, a TPA change, a significant claim, a pending litigation matter.
This section is not competitive intelligence. You are not giving away anything by describing your program. You are getting better bids.
2. Scope of work
Describe what you want the actuary to do. Be specific on the following:
- Evaluation date (e.g., December 31, 2026).
- Lines of business in scope and whether gross, net, or both.
- Accident years to be analyzed.
- Segmentation: by line, by coverage layer, by member/allocation, by state.
- Analysis standard: point estimate only, or point estimate plus range.
- Opinion requirement: signed Statement of Actuarial Opinion (SAO), report only, or other deliverable.
- Reinsurance/ceded analysis, if required.
- Allocation work, if this is a group captive or pool.
- Data reconciliation scope: whether you expect the actuary to reconcile to the general ledger or just analyze the triangles.
What you should not do in this section is prescribe methods. Do not say “use Bornhuetter-Ferguson with a Cape Cod overlay for accident years 2023 and 2024.” Method selection is the actuary’s professional judgment, and dictating it in the RFP tells every bidder that you either do not trust their judgment or do not understand the work. If you have strong views on method, raise them in the interview.
3. Data package
Provide the data with the RFP, not after. The reason is that actuaries price the engagement based on what the data looks like, not what you describe it as looking like. If the triangles are clean, the bid will reflect that. If they are a mess, the bid will reflect that too, and you will know up front where the cost is coming from.
At minimum, send:
- Loss triangles by accident year for each line, paid and reported, for the full analysis period.
- Exposure information by accident year (payroll for WC, sales or miles for auto, member months for health).
- Schedule of large losses above a reasonable threshold.
- Summary of reinsurance/stop-loss terms by treaty year.
- Most recent prior actuarial report, if you are comfortable sharing. If you are switching actuaries, the prior report is useful for the bidder to understand the baseline.
If any of these are not available, say so explicitly. The bidder will price accordingly rather than learning about the gap after the contract is signed.
4. Deliverables
Describe what you want to receive, in writing.
- Written report: approximate page count expected, required sections (summary, methodology, diagnostics, assumptions, results by line and accident year, range).
- Signed opinion, if required, including any regulatory template (NAIC SAO format, state-specific format).
- Supporting exhibits: electronic format (Excel) expected, including triangles, development factors, selected ultimates.
- Meetings: opinion call, audit committee presentation, captive board meeting. Specify number and format.
- Timeline for deliverables: preliminary results by date X, draft report by date Y, final report by date Z.
5. Evaluation criteria
Tell the bidders how you will evaluate them. This forces them to address what you actually care about.
Common criteria and typical weightings for a professional reserve engagement:
- Signing actuary qualifications (10 to 15 percent): who signs, credentials, years of experience, relevant program experience.
- Team qualifications (10 percent): who does the analysis under the signing actuary.
- Technical approach (20 to 25 percent): how the firm approaches method selection, diagnostics, range construction, and documentation.
- Relevant experience (15 to 20 percent): program type, lines, domicile.
- References (10 percent): current clients willing to speak with you.
- Fee (20 to 25 percent): price should be a factor, but not the dominant one. If fee is 50 percent of your evaluation, you will get the cheapest bid, not the best reviewer.
- Independence and conflicts (5 to 10 percent): firm relationships with your broker, TPA, captive manager, or parent.
6. Timeline
Give bidders at least three weeks to respond. Two weeks is common and usually inadequate for a serious response. One week is a signal that you have already decided and the RFP is for show.
Include:
- RFP issue date.
- Questions due from bidders.
- RFP responses due.
- Interview window.
- Selection decision date.
- Engagement start date.
- Preliminary results due.
- Draft report due.
- Final report due.
7. Commercial terms
Specify:
- Fee structure expected: fixed fee or hourly with cap. Most buyers should require a cap.
- Expense policy: usually pass-through at cost with a cap.
- Payment terms: usually 50 percent at engagement, 50 percent at delivery, or progress payments tied to milestones.
- Engagement length: annual or multi-year. Multi-year engagements reduce your switching cost to the firm. Structure them to include a termination clause.
What to leave out of the RFP
A few things do not belong in a reserve review RFP and weaken the process when they appear.
Method prescriptions. Already covered. Let the actuary pick.
Detailed technical questions intended to quiz the bidder. You are not testing actuarial competence on the RFP response; you are testing fit. Save the technical questions for the interview, when you can hear the reasoning.
Excessive legal language. Reserve engagements are not complex from a contract perspective. A 60-page master services agreement attached to an RFP for a $40,000 engagement is a signal to bidders that working with you will be painful. A short, clear engagement letter is adequate.
Broker-language boilerplate. If your RFP reads like it was written by a broker, bidders will assume the broker is driving the decision. Some firms will decline to bid because they have had bad experiences with broker-led engagements.
Scoring the responses
When the proposals come back, resist the urge to jump to fee. Read the technical sections first.
A scoring matrix with the weightings you disclosed helps. For each firm, score the same categories. Rank, do not average, on the qualitative sections; a firm that is “strong” on technical approach should outrank a firm that is “adequate” on every category.
Look for:
- Specificity. A proposal that describes how the firm will approach diagnostics for your particular program is worth more than a proposal with boilerplate language on diagnostics.
- Named signing actuary, explicitly. Not “the appropriate signing actuary will be assigned.” A name.
- Addressed your program type. The proposal should reference your lines, your structure, your domicile. A proposal that could have been sent to any buyer is not a proposal to you.
- Realistic timeline. If your data is messy, a firm promising a final report in 30 days is either lying or will deliver reduced scope.
- Fee structure clarity. A fixed fee you can verify and a cap you can rely on.
The interview
Short-list two or three firms for interviews. One hour per firm, with the signing actuary in the room, is enough. Use the interview to probe the technical approach, ask about a past engagement similar to yours, and test the working relationship.
The fullest version of this interview is covered in its own article: how to interview a reserve actuary.
Red flags in responses
- No named signing actuary.
- Fee quoted as “to be determined based on data review.”
- Proposal is generic; no reference to your program.
- Firm declines to name current clients for references.
- Firm is the incumbent and the proposal is shorter than last year’s without explanation.
- Team on the proposal is different from the team you met in prior engagements, with no explanation.
- Any bundling of reserve work with broker placement or captive management services.
What a good engagement looks like from day one
If the RFP was written well and the responses were scored well, the engagement starts with:
- A kickoff call within a week of the engagement letter.
- A detailed data request that aligns with the data package you sent.
- A named working team and a named signing actuary, both available to you.
- A project plan with milestones, not just end dates.
- Clear channels for questions during the work.
If the first two weeks of the engagement do not look like this, something was missed in the scoping.
Related reading
- What a Reserve Review Should Cost: fee ranges and the scope levers that move price up or down.
- How to Read an Actuarial Proposal: what a good proposal looks like and the red flags in a weak one.
- How to Interview a Reserve Actuary: the 12 questions that separate pros from approximators.
Looking for independent reviewers to send the RFP to? The hire an actuary directory is in development. Join the waitlist there.