Why it Works, How it Works,

and What’s in it for you

Kathy Johnson, Risk Mgmt. Strategies

Erin Green, Greendale School District

The Wisconsin Educators Risk Management Co-op

WERMC

What Is Needed

1. Interested Carriers

Competition between carriers is key Underwriters often don’t like “pools” Some carriers don’t like groups Carriers don’t like having to take all districts Carriers who’ll give extra service

and/or savings Carriers’ coverage & claims philosophy

that “fits”

2. Carriers-What Makes a Carrier Interested?

Opportunity for profitability Up-front savings short-lived if losses don’t support the premiums

“Soft” or “hard” market drives pricing and service

Insuring districts that have the “right” attitude

Pricing each district independently

3. Coverages Included

Casualty: liability and Workers’ Compensation

Other coverages-any carrier

Crime Property Boiler Pollution for storage tanks Cyber Liability

4. Membership of Districts Who

are interested in “joining”are interested in saving moneyare committed to long-term service and savingsare willing to do Best Practiceswill attend meetings to learn from speakers and each otherwill share concerns and what they learnwant to learn how to do “it” better

And Biz Managers who are willing to serve

Pros and Cons of a Co-op

Pros

1. Education/training

2. “Extras” from carriers

3. Carrier relationship

4. Resources

5. Power of profitable premium

6. Consultant to guide and advise

7. Long-term attitude allows negotiation

Cons

1. In “soft” market, higher dividends “out there”

2. Success depends on participation and sharing of purpose

3. Realties of local politics and getting buy-in

Advantages to School District

Safety consultant assigned to your district

Possible discounted attorney rates

Informational seminars/training

Ability to receive liability premium discount

Risk consultant’s assistance with issues and purchase/renewal of insurance

Power in numbers (negotiate “extras”)

Resources to make your job easier

To Get Buy In:

Do an annual risk management report to the board to provide education, while considering or after joining

Stress the buying power of 35 districts= $4.5 M of premium vs. small district on own

Point out possible gaps if insurance not the best available

Point out areas of possible large losses, such as labor law issues , W/C --needing expertise

Stress this is “proactive” management of risks

A Co-Op: Consider This

Look at the stability of the premium (liability/E &O) over time with chosen carrier

Consider “extras” carrier will provide due to power of premium or usual practices

Look at short term gain (one year premium savings on bid) vs. long-term stability of premium/comprehensive coverages and services

We are all busy…so… put effort where the payoff is, which you will learn thru a co-op’s resources and education

A Co-Op Offers Value:

Ensures broad coverage and “extras”

Ensures limits adequate for the exposure

Long-term plan for best pricing and risk management Best Practices

W/C: Creative dividend structure related to loss history to ensure longevity

District Realities

Political or relationship realities with agents/carriers

Perceived competition with a “recommended” carrier

Complexities of Biz Officials understanding commercial lines of insurance (apples to apples)

Difficulty of explaining complexities to Superintendent/Board