Despite rising costs, Gray Highlands will remain with its municipal insurance provider for a further two years.
The municipality has had liability and property insurance from Marsh Canada since 2011, when the firm operated as Jardine Lloyd Thompson.
City rates have increased more than 20% in each of the past two years. The board authorized the decision to stay with Marsh Canada at a March 2 board meeting.
Last year and 2022 saw rate increases of 34% and 22%, respectively, continuing a trend that has persisted for several years.
Between 2019 and 2022, municipal insurance costs have increased from $271,147 to $509,392 per year.
CAO Karen Govan said climate change has played a significant role in driving up insurance costs.
“With insurance, it’s a global commodity and … these catastrophic weather events happening around the world are affecting insurance on every level,” she said.
“We’re not going to see dramatic declines in insurance until we fix the biggest problem that… is coming back to the planet,” she said. “These significant weather events are definitely catching up with us because these losses are astronomical.”
Gray Highlands staff recommended renewing insurance with Marsh Canada, despite the costs, due to the current volatility in the insurance market.
“The municipal insurance market right now is extremely volatile,” Govan said. “There are very few people contributing on municipal insurance at the moment, I think there are three insurance companies…so it’s not really a competitive time to go out.”
Govan said the request for proposals (RFP) process to find a new insurance broker is long and time-consuming, and probably not worth it given the current state of the market.
“It’s a lot of work to go through the bidding process, especially the evaluation side of a bidding process, because with insurance it’s a very complex situation” , she said. “I know it’s not ideal, but we don’t think there’s a competitive advantage at this stage to go out to tender and we hope the market stabilizes and other insurers come forward. .”
Last year, Gray Highlands Council backed a report by the Association of Municipalities of Ontario (AMO), which made seven recommendations for the province to address rising insurance costs, and received the support of a growing number of municipalities.
Govan also said the municipality plans to work with neighbors to seek out a more affordable insurance policy.
“The Northern Six, which are the municipalities north of Toronto … were able to kind of combine their needs and get them a more attractive policy,” Govan said. “We’re talking about it with the county…so, you know, there’s some benefits to that – maybe it’s something we’re looking at even bigger and beyond Gray County.”
