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Executive - 25 April 2006 - Insurance Tender

By Joel Brooks,2014-05-13 02:21
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Executive - 25 April 2006 - Insurance Tender

    Agenda Item: 5 [h]

    INSURANCE TENDER KEY DECISION

    Resolution Required

    Report of the Strategic Director (Support)

    Executive Summary

Main Issues

    ? The Council has tendered the insurance portfolio and the best price can be

    achieved by retaining the current provider.

Options

    (a) Award the portfolio in its entirety to the Council’s existing provider as

    recommended in the confidential report [circulated to Executive Members

    only under separate cover on gold paper] from Heath Lambert Group, the

    Council’s advisor.

Corporate Priority

    Making Spelthorne safer / Engaging younger people / Making Spelthorne a better

    place/ Improving customer satisfaction

Officer Recommendations

    The Executive is asked to agree:

    1. That the Insurance portfolio in its entirety is awarded to the Council’s

    current provider.

    2. That the Insurance excess on the casualty policies be set at ?10,000 and

    that a reserve of ?100,000 be earmarked from our balances to meet any

    potential claims.

    Agenda Item: 5 [h]

    REPORT

1. BACKGROUND

    1.1 The Council has tendered the insurance portfolio and the best price can be

    achieved by retaining the existing provider. A negotiated procedure was

    followed, which provided an opportunity for the Council to maximise the

    savings available. The extended nature of the negotiation process meant that

    the Council agreed a thirty day extension to the process to enable it to be

    completed in April.

    2. OPTIONS

    The best price can be obtained from awarding the whole portfolio to our

    existing provider, as recommended in the confidential report from Heath

    Lambert Group, the Council’s advisor. The contract would be for a three year

    period with the option to extend for an additional two year period 3. PROPOSALS

    3.1 In order to reduce the cost of the insurance premiums, Officers have to

    consider increasing the deductible excesses in event of claims on the casualty

    policy. The policy deductible will be ?10,000, which will apply to any one

    occurrence. This, in effect, means that the Council will meet the cost of the

    first ?10,000 of any one claim. In order to have a budget to meet this an

    insurance reserve will be set up.

    4. FINANCIAL IMPLICATIONS

    4.1 By increasing the excess on the casualty policy, savings of ?72,151 can be

    achieved which represents a saving of 16%.

    5. LEGAL IMPLICATIONS / OTHER CONSIDERATIONS

    5.1 By increasing the excesses on the casualty policy, the Council will

    undoubtedly be taking on some risk. However, I believe this to be

    manageable, having regard to our recent years’ claims experience.

    5.2 By retaining the current provider, in addition to obtaining the best deal

    available for the Council, we avoid the transitional impact of setting up new

    procedures with a different set of insurers and underwriters. 6. RISK IMPLICATIONS

    6.1 By increasing the excesses on the casualty policy, the Council will be taking

    on some additional risk. On the basis of recent years’ claims experience, it is

    believed this risk can be adequately covered by the setting up of a new

    insurance reserve. However, if we had an exceptionally high number of

    casualty claims in anyone year we might find the balance in the reserve would

    be insufficient. Claims experience will be monitored. 7. SUPPORT FOR CORPORATE PRIORITIES

    7.1 This report supports all 4 Corporate Priorities.

    8. OFFICER RECOMMENDATIONS

    8.1 That the Insurance portfolio in its entirety is awarded to the current provider in

    accordance with the confidential report from Heath Lambert Group, the

    Council’s advisor.

8.2 That the Insurance excess on the casualty policies be set at ?10,000 and that

    a small reserve of ?100,000 be earmarked from our balances to meet any

    potential claims.

Contact:

    Sue Sturgeon, Strategic Director (Support) on Tel: 01784 446225

     Report Author:

    Sue Sturgeon, Strategic Director (Support) on Tel: 01784 446225

    Portfolio Holder: Councillor Ed Searancke

Background papers:

    There are none

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