HomeMy WebLinkAbout~Master - Property Insurance Renewal for FY2021/22 RESOLUTION NO. 21-311
RESOLUTION APPROVING PROPERTY INSURANCE RENEWAL FOR FY 2021/22
FOR THE CITY OF AMES,IOWA
WHEREAS, the City contracts with Willis of Greater Kansas, Inc., to provide property
insurance brokerage services for the City's property insurance program; and,
WHEREAS,Willis has obtained quotes for property insurance coverage for FY 2021/22;and,
WHEREAS, the City's property insurance program is split into two main components:
1. The "Power" component, which covers Resource Recovery, the Power Plant, and
assets related to the electrical infrastructure.In FY 2018/19 this coverage was moved
to Starr Tech.
2. The "Municipal" component, which covers all other City property has been
underwritten by Chubb Insurance Group since 2012.
WHEREAS, splitting the City's insurance coverage into two major components allows for
an optimization of terms and pricing to fit each insurer's specialty, rather than placing all City
property under a one-size-fits-all program,and the broker arranges for flood insurance for properties
susceptible to flood damage (CyRide, WPC, and Furman Aquatic Center); and,
WHEREAS, after initiating the Brokerage Arrangement with Willis, the City modified its
philosophy regarding how much insurance to purchase for property coverage; and,
WHEREAS,prior to 2012,the City purchased insurance coverage equal to 100%of the total
value of all City assets, even though there was a very small likelihood that all of the City's assets
would be totally destroyed in even the most devastating of events; and,
WHEREAS, in 2012, the City Council authorized staff to procure insurance using the
technique of Maximum Foreseeable Loss (MFL); and,
WHEREAS, the municipal and flood coverage in the renewal proposal comes from Chubb
(municipal property) and RSUI Group (flood insurance); and,
WHEREAS,the account rate for Chubb and RSUI have increased compared to FY 2020/21,
and this is due to the commercial property market hardening because of an increasing number of
catastrophic events worldwide; and,
WHEREAS, the flood insurance quote also increased because of the recent flooding in the
Midwest; and,
WHEREAS, staff had requested Willis to take the municipal property and flood insurance
to the marketplace,but no other carrier was able to improve upon the incumbent carriers'rates;and,
WHEREAS, the FY 2021/22 "Power"Facilities Renewal rate was quoted at$523,049 and
the FY 2021/22 "Municipal" Facilities Renewal rate was quoted at $291,094; and,
WHEREAS, knowing that the property coverage rate guarantee was ending in the current
fiscal year,and also anticipating rate increases due to insurance market forces,City staff incorporated
a larger than normal increase in funding into the FY 2021/22 recommended budget.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa,
that the renewal for the Property insurance program coverage at the combined quoted premium of
$814,143 for FY 2021/22, is hereby approved.
ADOPTED THIS 8`'day of June, 2021.
Diane R. Voss, City Clerk John A. Haila, Mayor
Introduced by: Corrieri
Seconded by: Betcher
Voting aye: Beatty-Hansen, Betcher, Corrieri, Gartin, Junck, Martin
Voting nay: None Absent: None
Resolution declared adopted and signed by the Mayor this 8t' day of June, 2021.