As municipalities face stark increases in insurance premiums over the last five years, Collingwood and others might test the waters of a resource pool leveraging the power of group buying.
During their committee of the whole meeting on Jan. 27, Collingwood council will be considering whether the town wants to join in on a new Simcoe (County) Municipalities Insurance Pool, organized through the County of Simcoe.
Set to launch on June 1, county-based program that will afford the county’s member municipalities (towns and townships) reduced rates and greater control over their insurance spend.
“Municipalities have been trying to find new ways of approaching insurance, and this method of working together as a group will yield savings and greater control for the town,” notes Michael Trueman, the town’s procurement manager, in the staff report prepared ahead of the meeting.
An insurance pool has its members contribute to a pool fund, which helps cover some of the claims costs and reduces insurance premiums, and spreads out the risk across more municipalities. It also leverages the buying power of a group of municipalities versus a single municipality to get better insurance rates.
He wrote that it was the staff's recommendation that Collingwood join the insurance pool.
According to Trevor Wilcox, the county's general manager of corporate performance, municipalities that join the pool will pay 10 per cent less for insurance.
Municipalities that don’t join the consortium at the outset will have to wait five years for their next opportunity to join, which isn’t guaranteed.
The pool works by having founding members determine who will be allowed to join in the future and they’re not obligated to accept new members.
New members would also be responsible for making an equity contribution that would bring them up to the same level as existing members.
Conversely, Wilcox noted, municipalities that join as founders can leave at their leisure.
Announced by the county earlier this month, at that time only Penetanguishene and New Tecumseth and two other yet-unnamed municipalities had signed on.
All of Simcoe County’s 16 member municipalities are eligible to take part, along with the separated cities of Barrie and Orillia, although so far Barrie has declined.
The county is providing presentations across Simcoe County over the next month to different councils hoping for buy-in.
The insurance pool is a result of a $500,000 investigation and review of insurance premiums. Trueman participated in the review.
According to Wilcox, the total spend by the municipalities and the county for insurance coverage last year was about $16 million, with about one-third — or around $5 million — going to cover claim costs. The remainder went to profit and administration costs.
Under the pool program, coverage will be under a single policy, with each municipality having access to the highest limits under each coverage. The county would hire between six and eight individuals to administer the program and the costs and benefits would be managed in-house.
The individual municipality is responsible for paying the deductible — $10,000 to $100,000 — depending on the category, such as liability, property or auto.
The pool pays the next $490,000 to $400,000, to a ceiling of $500,000, dependent on the deductible amount. The insurer pays everything over $500,000.
According to the Collingwood staff report, Collingwood has seen consistent growth in the cost of insurance premiums over the years. In 2018, the town paid $602,332, and that number has crept up with the town shelling out $1,030,907 for insurance in 2024. And those costs don't include cyber or water insurance, which will also not be covered by the pool.
Insurance premiums are expected to cost $1,072,449 in 2025. The town currently has three insurance providers: IPE, MEARIE, and CFC Underwriting Ltd.
If the town signs on to the pool, staff are estimating the town’s projected savings and accumulated equity in the pool would bring $1,966,159 in savings over five years to the town.
The current projected cost for the town to join the pool for June 1 will be $907,287, plus the continued cost of certain insurances not covered by the pool of $74,570. The town’s insurance is renewed annually following the calendar year, however there is no early termination penalty if the town chooses to leave mid-year.
Council’s committee of the whole meeting will take place on Monday, Jan. 27, immediately following the completion of council’s regular meeting, which starts at 2 p.m. Any members of the public may attend in-person in council chambers at Collingwood town hall, or virtually by Zoom webinar. The meeting will also be livestreamed on the town’s YouTube channel here.
- With files from Wayne Doyle