MINTO – Council here has directed staff to prepare a request for proposals for the municipality’s 2020 insurance coverage, after renewing the policy with its current carrier for 2019.
The Town of Minto’s 2019 premium will be $272,161, up $12,190 or 4.7 per cent from 2018.
A March 5 report to council from treasurer/acting clerk Gordon Duff points out the liability portion of the premium is up $5,700 to $119,700, which is 44% of the total premium. The blanket property amount increased from $83,906,520 to $88,399,009. In 2016 the property limit was $77,817,773.
Duff’s report also notes that in 2018 one dollar of premium insured $814 worth of property, while this year one dollar insures $828 of property. The premium for automobiles is up $2,796, even though the town has one less vehicle in its fleet.
The report notes damage from a major flood on June 23, 2017 and other claims have impacted the town’s record and “put upward pressure on our premiums.”
Since 2014, when the town switched to current carrier JLT following a competitive bid process, insurance premiums have increased an average of 4.5% per year.
However, the report notes that over the same period, the value of property insured has increased around $15 million dollars from about $73 million to now over $88 million (about a 3% increase per year).
“The town’s approach to risk management resulted in competitive pricing,” and “very stable premiums,” since 2014, the report notes.
“There are some jurisdictions that routinely have double digit premium increases each year due to rising liability. Premiums can be affected by one or two major accidents which cannot be forecast no matter how good risk management procedures are in a municipality.”
In 2013, the town’s premium, after years of steady increases, was at $249,925. It dropped to $228,246 the following year under JLT and never got back to the 2013 level until 2018, when the premium was $259,071.
“While town liability premiums have increased modestly, provincial action on joint and several liability is still encouraged and could reduce liability costs for all municipalities,” Duff notes in the report.
The town expects an updated asset management plan to be adopted in late summer, which would assist with providing information needed for the RFP.
Staff are aiming for late fall for the RFP.
“This would give council sufficient time to review the proposals well in advance of the March 1, 2020 renewal date,” the report notes.
Steve Wylie of Wylie Insurance Brokers pointed out the $5,000 increase in liability premium is the first since JLT took over the policy. “Automobile also had a small increase, but that’s just market conditions,” Wylie noted.
Andrea Bartels of JLT also told council the increases are largely a response to overall market conditions.
“In 2017 we saw the most catastrophic losses in a very long time,” resulting in industry-wide reevaluation in 2018, she said.
“Because the insurance market has been so soft for so long, with premiums lower than could really be sustainable, underwriters were forced to be more meticulous with their underwriting and charge appropriately for their risks,” Bartels explained.
“The market is hardening across all lines of insurance, municipal in particular.”
Mayor George Bridge said he hopes to see the provincial government finally take action on the joint and several liability laws, which can compel municipalities to pay the bulk of settlements for lawsuits in which they are only marginally liable.
“If we’re found two per cent or five per cent responsible and all the (other parties’) insurance is used up, the municipality ends up picking it up,” said Bridge.
“I’m hoping we get something like Saskatchewan where there’s a cap.
“I know this government promised that this is something they would put pressure on.”
Council received the report and approved the 2019 renewal with JLT.
It also directed staff to prepare an RFP to be open for submissions in the fall of 2019.
Acting CAO Chris Harrow said it would not be necessary to engage a consultant to assist with preparing the RFP, as information in the asset management plan will be available and staff can also use as “a template” 2014 insurance RFP documents, which were prepared with the aid of a consultant.
