Simcoe County council is looking for a break on insurance and that could include member municipalities banding together for better rates.
It was announced Tuesday that the county had completed a feasibility study to create an insurance pool to combat what council members believe is gouging by insurance companies when individual towns and townships strike their own deals.
The study, which included participation from all member municipalities, plus the City of Orillia, looked at the amount of insurance now being paid in different classifications.
The county's consultant worked on an analysis, which has come up with “very favourable results,” said Trevor Wilcox, the county's general manager of corporate performance.
“In fact, so favourable that they feel there could be a savings in year one, which is very unusual for this kind of valuation, and certainly an ongoing reduction in costs to municipalities," he said.
Wilcox says this is a long-term approach, where the key is to provide stability to premiums, as well as the ability to use increased buying power, to have lower premiums, to spread the risk across other municipalities, and to gain greater control over insurance costs.
“Through the feasibility study, (numbers) have shown this is something that could benefit all of us," he said. "The more of us that participate, potentially the greater the benefit."
A move to the next phase would now include looking at an implementation plan, which would outline the details for each municipality, its impact and what staffing needs would be required to operate a pool.
“The pool then allows us to share our buying power and ultimately we buy less insurance overall than we are buying now,” Wilcox said.
He warned county council to not be surprised if members’ insurance renewals “come in pretty competitive this year, because they have all heard that we are looking at this. And I’ve already heard one comment that we are not getting any real increase this year.
“If you do get those kinds of comments, please ask about the trend that’s happened over the last five to 10 years,” Wilcox added. “You’ll see we’ve all had to deal with significant jumps in a number of areas. We’ve had to deal with cancellation of insurance — for example, for cyber-insurance.
"So whether we like it or not, we’re in a pool. When we are buying insurance, we’re in this big pool with all the other municipalities. What this allows us to do is take a lot more control in the pool that we manage."
The consultant's report is recommending council move forward with the implementation plan.
Wilcox said they are asking for a budget of $200,000 for the plan.
“A bunch of that will be paid for the consultant to do their work, but I think it will more than pay for itself in the end,” he said, adding the plan will require six to eight months to pull together.
“The key is to have a commitment,” Wilcox stressed. “We will ask for a five-year commitment to join this. It’s not like you’ll be able to play a wait-and-see game and sit on the sidelines for this; we need commitment and it takes that time to really show the benefits of the pool.”
Wasaga Beach Mayor Brian Smith agreed.
“What we all know is that insurance companies are not our friends, although they like us to believe that they are when we sign our cheques over to them,” he said. “We need to find a solution to this. This is not going to get better — it’s going to get much worse.”
Innisfil Mayor Lynn Dollin lamented losing their cyber-security insurance, which has also happened to other municipalities.
“If they do come in and undercut just by a bit, remember the days that they came in with double-digit increases and reduced your coverage," Dollin said.
Midland Mayor Bill Gordon said he was keen on group purchasing and any advantages that come with it.
“There’s a lot of power in all these municipalities,” he said. “If (the Association of Municipalities of Ontario) got behind this and we negotiated through the AMO for a vendor of record for five-year terms, we would find these companies tripping over themselves for that kind of business. This could be really really big," he said.
Council voted unanimously to move ahead to the next phase of the analysis.
