Decision details

To consider a report of the Chief Internal Auditor seeking approval of the award of the contract to supply the Council’s Insurance covers for the period 1^st April 2010 to 31^st March 2015. 

The insurance polices are written on an annual basis but under the terms of a 5 year ‘Long Term Agreement’.  The LTA provides the Council with a premium discount on the basis that the business in placed with the insurer for the agreed period.

(i)  To approve the placement of the corporate insurance programme via  a composite package comprising a number of different suppliers (as detailed in  Confidential Appendix 1);

(ii)  To approve a 5 year agreement;

(iii)  To approve the higher deductibles (excesses) in respect of Liability and Property claims.

1)  The placing of cover with a number of insurance providers will result in a reduction in the overall insurance premium spend noting that the holding insurer was not prepared to allow their package of covers to be split.

2)  The new programme includes all major extensions to cover in addition to including additional benefits and some cover restrictions. Whilst the placing of cover with one insurer can reduce the risk of gaps or overlaps in the programme the comprehensive market presentation document and robust evaluation process has served to reduce this risk

3)  A 5 year agreement secures additional savings and introduces an element of stability in terms of future costs.  In addition, the Council’s appointed insurance broker (Marsh) believes that rates may start to rise shortly and that the well publicised issues within financial markets globally will, at some point, impact on reinsurance and general insurance markets forcing rates up.

4)  The acceptance of higher excesses in respect of Liability and Property claims will create an additional potential demand on the internal insurance fund however, based on loss history, it is considered that this will be able to be accommodated within current self insurance arrangements.

1)  There is no provision within the current arrangement for the contract to be extended.

2)  It is not considered reasonable for the Council to proceed without having an appropriate insurance programme in place in order to protect the Council’s financial exposure.