The costs of property insurance have risen considerably over the past few years, resulting in both higher premiums and increased policy excesses. There has been little or no market competition.
The insurance company will provide:-
1. Long-term improved budget stability
- Fairer rating mechanism
- Less penalty for large losses
- Transparency of pricing
- Reductions in premium with improved individual performance
2. Long term reduction in budgets
- Immediate potential to capture improved loss experience
- Incorporation of risk management standards to improve performance
The consortium of councils will share risks and work closely to develop these objectives. The project compliments a number of efficient government themes:-
The consortium of councils, by acting together, will increase market competition, drive down prices, and reduce the costs of procurement.
(2) Support Service Reform
The consortium will develop standardisation of insurance and risk management practices across a number of councils. This will lead to an increase in standards overall, reducing the likelihood of major insurance losses.
(3) Transactional Services
Claims handling will be centralised resulting in a reduction in the administration costs of each participating council. Claims will be notified electronically, reducing the reliance on paper based systems.
(4) Policy, Funding & Regulation
The return on investment is potentially significant. This will enable councils to improve facilities, improve risk, thereby enabling further reductions in insurance premiums. This will also result in a reallocation of resources to front line services, particularly education.