Clearview seeks savings with insurance pool
Clearview Township could save more than half a million dollars in premiums over the next five years with the decision to join the Municipalities of Simcoe County Insurance Pool. In a presentation to council this week, Ryan Durrell of Axxima Actuarial and Insurance Management estimated the county and its member municipalities would spend more than $20.6 million in premiums in 2025 to maintain existing policies. By creating a pool to self-insure many risks, the municipalities will save an estimated 19.2 percent a year.
Durrell told council that participating in an insurance pool is rather like cooking at home versus dining out, saying, “I won’t go out for a bowl of spaghetti because I can cook that at home, but for specialties I will still go to the experts.”
Durrell told councillors that in an average year, only 34 cents of each dollar spent on premiums is used to cover claims. About 31 cents goes to profit and risk margins for the insurance companies and 35 cents to operating expenses.
“By building out in-house capabilities it becomes more efficient to buy less insurance,” he said. “Municipalities can reduce or avoid losses with better risk management, increase deductibles and use pooling to reduce volatility and create centralized resources. The pool can cover claims up to $500,000 and then purchase additional coverage for large, unpredictable losses.”
Durrell says the pool, expected to launch June 1, will provide coverage that is as good or better than existing individual policies.
“Each municipality will have access to the highest limits of coverage with deductibles ranging from $10,000 to $100,000 depending on the size of the municipality,” he said. “The plan will be overseen by an advisory board with one member from each participating municipality.”
Without joining the pool, it is anticipated that Clearview would spend $662,647 in insurance premiums for 2025.
The resolution adopted by council calls for a 10 per cent savings up front in the first two years, with 9.2 per cent deferred savings invested in building up the pool. By Year 6 and beyond, savings should approach 26 per cent per year. By 2029, it is projected that the township will have saved $545,488 in premiums, and built up $517,750 in equity in the program.
