Insurance firms ‘not our friends’ as county seeks buying power

Simcoe County Council is looking at a freeze on insurance and could involve member municipalities banding together for better rates.

It was announced Tuesday that the county has completed a feasibility study to create an insurance pool that council members believe would be better than what insurance companies would get if individual towns and townships made their own deals. An insurance pool can be created to deal with this.

The study, which included participation from all member municipalities and the City of Orillia, looked at the amount of insurance now paid across different classifications.

Trevor Wilcox, the county's general manager of corporate performance, said the county's consultant worked on an analysis that yielded “very favorable results.”

“In fact, so favorable that they think there may be savings in the first year, which is very unusual for this kind of valuation, and certainly there is a sustained reduction in costs to municipalities,” he said.

Wilcox says it's a long-term approach, where the key is to provide stability to premiums, as well as the ability to harness increased buying power, keep premiums lower, spread risk across other municipalities and gain more control. insurance cost.

“Through the feasibility study, (the numbers) have shown that this is something that can benefit us all,” he said. “The more we participate, the greater the benefits potentially.”

The next step will now involve looking at an implementation plan, outlining the details of each municipality, its impact and what staff will be needed to operate the pool.

“Then the pool allows us to share our purchasing power and ultimately we buy less insurance overall than we are buying now,” Wilcox said.

He warned the County Council not to be surprised if members' insurance renewals become quite competitive this year, as they have all heard we are considering. And I've already heard a comment that we're not getting any real growth this year.

“If you get comments like this, please ask about the trend over the last five to 10 years,” Wilcox said. “You will see that we have all faced significant surges in many areas. We have had to deal with insurance cancellations – for example, for cyber-insurance.

“So whether we like it or not, we're in a pool. When we're buying insurance, we're in this big pool with all the other municipalities. It allows us to have a lot more control in the pool that We manage.”

The consultant's report is recommending the Council move forward with an implementation plan.

Wilcox said they are asking for a $200,000 budget for the plan.

“A large portion of it will be paying for the consultant to do his job, but I think in the end it will more than pay for itself,” he said. Six to eight months will be required to complete the plan, he said.

“The main thing is to keep the commitment,” Wilcox stressed. “We will be asking for a five-year commitment to be involved. It is not that you will be able to play the game of wait and see and sit on the sidelines for this; We require commitment and it takes time to really show the benefits of the pool.

Wasaga Beach Mayor Brian Smith agreed.

He said, “We all know that insurance companies are not our friends, although they want us to believe that they are when we sign our checks over to them.” “We need to find a solution. “It's not going to get better – it's going to get worse.”

Innisfil Mayor Lynn Dollin lamented losing his cyber-security insurance, which has happened to other municipalities.

“If they come in and make a little bit of a cut, remember the days when they came in with double-digit increases and reduced your coverage,” Dollin said.

Midland Mayor Bill Gordon said he looks forward to the group purchase and any benefits that come with it.

“All of these municipalities have a lot of power,” he said. “If (the Association of Municipalities of Ontario) got behind this and we negotiated through the AMO for a vendor of record for a five-year period, we would find that these companies are deluding themselves into that kind of business.” Have been. “It could be really huge,” he said.

The council voted unanimously to proceed to the next phase of analysis.