• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • Social care workforce crisis ‘requires government intervention’

    August 15, 2022

  • Consultation opens on future of IFRS 9 statutory override

    August 12, 2022

  • EAPF criticised for water company investments

    August 10, 2022

  • Welsh pension fund confirms £50m investment in clean energy

    August 10, 2022

  • Inflation ‘disastrous’ for local services, warns LGA

    August 10, 2022

  • Consultation opens into care charging reforms

    August 9, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

Mutual launches to compete in insurance market

0
  • by Gavin Hinks
  • in 151 News · Resources
  • — 30 Apr, 2019

A group of councils has joined the Local Government Association (LGA) in launching a new mutual aimed at offering a better deal for councils on insurance.

The mutual will see council pool funds to help local authority members “retain” risk instead of buying insurance on the open market.

Ian Rogers, director of the new mutual, said: “Over time the mutual offers a sustainable alternative to insurance that is value for money based on true cost of risk.

“It’s about bringing value for members, it’s about improving their risks and not about making profits.”

The mutual is yet to sign up its first paying members but is in talks with a number of councils, Rogers said.

Councils who become members will be expected to make “contributions”, or premiums, to create a pool from which claims can be made.

The mutual also aims to provide the opportunity to share best practice in risk management.

Contributions will also go towards buying reinsurance from a panel of providers chosen through a “dynamic” purchasing system.

Cover provided by the mutual will include construction, damage to machinery and computer equipment, liability, property and fleet.

Other advantages claimed by the mutual include complete transparency of finances for members and the potential for retaining surpluses.

Jon Taylor, mutual manager for LGM Management Services — the mutual’s management company — said surpluses had to be used for the benefit of the membership as a whole.

“The usual uses would be to place some money into reserves. If the mutual were to have less than average years, reserves might be desirable.

“There is the prospect too of a distribution to members.

“Or, it could be used to reduce future contributions or, as quite often happens, it can be used for things like risk management initiatives, which could come in many forms.

“It’s the members who decide how the surplus is used.”

Andrew Jepp, managing director at Zurich Municipal, a major provider of insurance to local authorities, is concerned whether the mutual is willing “to participate in tenders to allow local authorities to compare properly the value of what is a long-term and complex purchase.”

Jepp emphasised that the range of risks faced by local government is complex, ranging from safeguarding claims, personal injury, and potential property losses involving schools, housing and buildings of historic significance.

“What is vital is the experience of and capability of the insurer to manage these types of losses to minimise the impact on local authorities and the communities they serve,” said Jepp. “It is also worth noting that local authorities already fund a significant proportion of claims themselves to maximise the efficiency of their insurance arrangements.”

In 2018 the public sector insurance market was worth £695m, according to Tussell, the data researchers. Almost four fifths of that went to the top ten suppliers. The top buyer of insurance was Northern Housing Consortium, with £181m in contracts followed by three London boroughs: Lewisham, £90m; Croydon, £60m; Bexley, £19m. Top providers include Marsh, £187m and Zurich, £153m.

“This [the mutual] is about having more competition in the market,” said Rogers. He added that councils would still be able to compare costs though they may not go out to tender if their needs were covered by the mutual.

The LG Mutual examined several other mutuals that have so far proved successful, including The Fire & Rescue Indemnity Company and the Risk Protection Arrangement set up by central government for academy schools.

It also looked at the Activities Industry Mutual, a body providing insurance for the outdoor activities sector. The body now has 800 members and a 40% market share.

Founding councils include Trafford, Enfield, Hart, Gedling, Broadland, Bury, Charnwood, Crawley, East Herts, Milton Keynes, South Keveston, Nuneaton and Bedworth, Barnsley and Suffolk.

Get the Room 151 Newsletter

Room151 Conferences & Events

Share

You may also like...

  • key, property, housing, Northern LGPS pool to invest £150m in affordable housing 20th Apr, 2022
  • Delay to IFRS 16 agreed by ‘narrowest possible margin’ 18th Mar, 2022
  • What has been happening to the outlook for UK bank rate? 26th Oct, 2021
  • ‘Urgent consultation’ issued in response to continuing audit delays 13th May, 2022

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • 151 BRIEFS – WHAT’s NEW?

    • Social care workforce crisis ‘requires government intervention’
    • Consultation opens on future of IFRS 9 statutory override
    • EAPF criticised for water company investments
    • Welsh pension fund confirms £50m investment in clean energy
    • Inflation ‘disastrous’ for local services, warns LGA
  • Room151’s LGPS Roundtables

    Biodiversity
    Valuations & Risk
    LGPS Women

  • Room151’s LGPS Roundtables

    Biodiversity
    LGPS Women
    Valuations & Risk
  • Latest tweets

    Room151 4 days ago

    LATIF/FDs’ Summit ‘on course to be biggest yet’: Room151’s flagship event – the Local Authority Treasurers Investment Forum (LATIF) and FDs’ Summit – is on course to be the biggest yet, with more than 200 delegates expected. Combining[...] dlvr.it/SWSDrL pic.twitter.com/f8FXzcAdWB

    Room151 4 days ago

    ‘Local government treated worse than any other part of public sector’: Clive Betts, chair of the Levelling Up, Housing and Communities Committee, talks to Mike Thatcher about lack of progress on levelling up, pork-barrel politics and why local government… dlvr.it/SWRk1L pic.twitter.com/Jpw0BsOsy3

    Room151 5 days ago

    Which LGPS pools and funds are attending the LGPS Investment Forum on Nov 2 & the LGPS Private Markets Forum on Nov 1st? Answer here: lnkd.in/eDHU8tuy pic.twitter.com/D3gd63Rh7F

    Room151 6 days ago

    LGPS and levelling up: nothing to fear but fear itself: There have been a number of objections to government plans for LGPS funds to invest 5% of their assets in local projects. But George Graham says these objections can be[...] dlvr.it/SWL7vt pic.twitter.com/ebwBEkZTy4

    Room151 6 days ago

    George Graham @SYpensions @bordertocoast channels his inner FDR in a call for local government pension funds to avoid the fear factor and embrace levelling up #LGPS #localgov room151.co.uk/local-governme…

    Room151 1 week ago

    Changes to rules on capital receipts raise wider questions: Stephen Kitching argues that DLUHC’s latest rule changes are part of a series following on from revisions to MRP guidance and the purchase of commercial property. He questions whether… dlvr.it/SWGqKC pic.twitter.com/Ycr5hWZDPk

    Room151 1 week ago

    ‘No ifs, no buts’: the Bank of England continues its battle with inflation: Partner Content: CCLA Investment Management’s Robert Evans discusses the MPC’s 0.5% increase in the Official Bank Rate and its ongoing commitment to the 2% inflation target… dlvr.it/SW7SNC pic.twitter.com/ryOzYRSNA9

    Room151 2 weeks ago

    DLUHC changes rules on flexible use of capital receipts: The levelling up secretary has written to all council leaders to amend the rules concerning the flexible use of capital receipts to fund transformation projects. In his letter, Greg Clark[...] dlvr.it/SW3jyX pic.twitter.com/KEhSSaMITl

    Room151 2 weeks ago

    Local audit and financial reporting: let’s take back control: Mazars’ Suresh Patel suggests three steps that auditors and council finance teams should take to help get financial reporting and local audit back on track. Following my recent appearance… dlvr.it/SW0PfV pic.twitter.com/miL7pjukce

  • Register to become a Room151 user

  • Previous story David Green: IFRS 9 checklist
  • Next story Spending review holding back planning reforms

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares