Insurance hike dodged, Aylmer saves $70,540

·3 min read

Aylmer councillors voted to switch municipal insurance providers to Marsh Canada Limited at $196,685 for its 2021-2022 policy in a special council meeting on Monday, April 26.

That amount is already less than the 2020-2021 policy total of $208,257 with Frank Cowan Company, and notably $70,540 under Cowan’s policy renewal cost proposal of $267,225. The new contract begins on May 1 and lasts one year.

Councillor Pete Barbour asked whether staff had conducted a comprehensive review of both contracts. “Are we pretty confident that we’re dealing apples to apples?”

Chief Administrative Officer Andy Grozelle said there were some minor differences between the two contracts, but both were adequate insurance packages for the municipality.

Cr. Arthur Oslach asked why there was such a difference in the costs. Mr. Grozelle said that Aylmer experienced some challenges with their insurance portfolio, such as sending forward a high volume of small claims.

“We have a very high kind of claim payout ratio, and that impacts us when you're with the same firm, but we did provide all the same information to Marsh as well,” said Mr. Grozelle.

Cr. Oslach asked where Marsh Canada was based. Mr. Grozelle said the firm used to be known as JLT Insurance, and that the company has offices in Toronto and London.

“They also provide insurance to several other Elgin County municipalities – Malahide, for instance, uses Marsh,” said Mr. Grozelle.

Cr. Barbour asked whether there could be a review of deductibles to see if there was any value in changing them. Mr. Grozelle said staff would spend more time talking to the insurance provider about deductible costs.

“I would like to increase them slightly. Because the lower the deductible, the higher amount you pay,” said Mr. Grozelle.

Aylmer would be dealing directly with the insurer through Marsh Canada Limited, rather than the broker, said Mr. Grozelle.

There are some files with Frank Cowan that are still ongoing through litigation, so that insurance company would continue to be involved until the outcome.

“$70,000 is a lot of money to leave on the table,” said Mr. Barbour. “Although I'm sure all of council would prefer to deal with a local broker, it's a lot of money.”

Deputy Mayor Sheri Andrews agreed, and council voted to go with Marsh Canada Limited.

In March, staff were notified of a large upcoming insurance increase, mainly due to the town’s past claims history. Staff then undertook a modified quotation process for insurance.

“There are limited insurance providers for municipal government. As a result, staff are confident that the two quotations received represent a similar outcome to what the Town would have received through a formal RFP process,” said Mr. Grozelle in his report.

The town established a budget of $220,368 for municipal insurance this year.

The 2020-2021 town insurance contract was for $208,275, a 20% increase over the previous year. Other municipalities across Ontario saw similar increases.

Veronica Reiner, Local Journalism Initiative Reporter, Aylmer Express