Report Prepared by: Rosa M. Kindred-Winzer, Insurance Coordinator
Title
SUBJECT: Property, Boiler and Machinery Insurance Renewal
REPORT IN BRIEF
Consider approving the renewal of the City’s policy through Alliant Property Insurance Programs (APIP) at 28.49% premium increase, amounting to $248,551.05 for program year 2018/2019.
RECOMMENDATION
City Council - Adopt a motion ratifying the renewal of the property and boiler and machinery insurance through the Alliant Property Insurance Programs (APIP), administered by Alliant Insurance Services for the period of July 1, 2018 through June 30, 2019; and authorizing the City Manager or Assistant City Manager to execute the necessary documents.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Refer to staff for further study; or,
3. Take no action.
AUTHORITY
Charter of the City of Merced, Article XI, Fiscal Administration.
CITY COUNCIL PRIORITIES
As provided for in the FY2018-19 Proposed Budget.
DISCUSSION
The City of Merced joined the Public Entity Property Insurance Program (PEPIP), a group purchasing program, as authorized by the City Council in 1993. The PEPIP program changed its name to Alliant Property Insurance Programs (APIP) after having merged with two other large Alliant Insurance purchasing pools. APIP now insures approximately 8,000 members with a total insurance value of $400 billion. The advantage of being a member of a purchasing group is that we are able to capitalize on lower premium rates based on the volume and value (per hundred dollars) of insured property.
The property market has been in a soft cycle for the past few years. This past year has seen an increase in the number of catastrophe with underwriters giving decreases based on the lack of catastrophe losses primarily from Hurricanes Harvey, Irma and Maria (HIM). The City of Merced has experienced an increase of 12.95% in total insured values amounting to $268,432,128. Due to the correction taking place in the marketplace, the City experienced an increase of 9.34% in account rate per hundred dollars of insured property value. The increased insurable values along with an increase in account rate (per hundred dollars) results in an overall premium increase of 28.49% in the amount of $248,551.05 for program year 2018/2019.
There are no changes to deductibles or levels of coverage to the property and boiler and machinery program for fiscal year 2018/2019.
IMPACT ON CITY RESOURCES
No appropriation of funds is needed. Funding is available within the Fiscal Year 2018-19 Proposed Budget.
ATTACHMENTS
1. 2018-2019 City of Merced Proposal Package