FROM: Stacey Barnier, Director of HR and Risk Management
SUBJECT: Engage Alliant Insurance Services and Marsh & McLennan Insurance Agency LLC for broker of record services to bind property and casualty insurance coverages
RECOMMENDATION:
title
Approve award of property and casualty insurance brokerage services contracts to Alliant Insurance Services and the Marsh & McLennan Insurance Agency LLC for fiscal year 2020-2021 in an amount not to exceed $248,088 with a contingency of $5,000 to account for extreme dislocations in the insurance market that might change some of the quotes prior to binding coverage. body
BACKGROUND:
SBCERA contracted with G2 Risk Consulting in 2019 to consult and provide recommendations after a complete review of insurance coverages. Gary Griffin provided the review and during this process, we found that SBCERA has contracted with Alliant Insurance Services as our insurance broker of record for many years and that no review of coverage had been conducted according to SBCERA records. Ultimately, Mr. Griffin assisted with the development of a two phase competitive process which was opened to the public that included a Request for Qualifications and followed by a Request for Proposals.
The two-phase competitive process was held in Spring 2020 which included an initial request for qualifications where insurance brokers across the country submitted proposals. We received seven responses and of those seven responses, two brokers most closely met the qualifications that we were seeking for our broker services. Each broker was given the opportunity to identify specific markets to approach and were ultimately assigned those markets to obtain coverage quotes. Upon completion of their marketing efforts, each broker was interviewed by a panel consisting of Debby Cherney, Barbara Hannah, Stacey Barnier and Gary Griffin.
Alliant Insurance Services, as our current broker, is the most familiar with our organization and serves many public agencies and retirement systems across the country. Marsh & McLennan Insurance Agency LLC submitted a polished response and demonstrated a strong understanding of our needs as an organization. Both Alliant and Marsh were invited to approach insurance markets for various lines of coverage on behalf of SBCERA. Each broker participated in an interview with staff and our risk management consultant to provide further detail on their quotes and proposals.
After thorough analysis of quotes and proposals, staff recommends that Alliant Insurance Services be engaged to bind Fiduciary Liability Insurance, Employment Practices Liability, and Fiduciary Dishonesty coverages. Alliant has a proprietary program that was created specifically for public retirement systems like SBCERA. This coverage includes maintaining our current fiduciary coverage amounts and increases our employment practices liability coverage limits to the appropriate level for an organization of our size.
Staff recommends that Marsh & McLennan Insurance Agency LLC be engaged to bind the remainder of our casualty insurance coverages including cyber, property, general liability, excess/umbrella, Crime, and worker’s compensation. Marsh demonstrated a strong understanding of our goals for improving protection in these areas and provided package quotes that allow SBCERA to realize significant overall savings while also giving SBCERA more control over managing claims in the area of worker’s compensation which has been problematic with our current insurer. The new broker and insurer will be working with SBCERA to develop stronger policies, procedures and programs to mitigate risk and proactively address risk issues.
The insurance market is experiencing significant challenges as a result of Covid-19 and the state of the world. Exhibit A outlines the recommended coverages and associated price quotes which are subject to change as a result of market conditions at the time we bind insurance coverage. As a result, staff recommends approval of contingency funding in the amount of $5,000 to account for extreme dislocations in the insurance market that might change some of the quotes prior to binding coverage.
COMMITTEE REVIEW:
This item was reviewed by the Administrative Committee at its May 21, 2020 meeting and recommends Board approval, with a 4-0 vote.
BUDGET IMPACT:
Costs for this item are included in the current year administrative budget.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Operational Excellence & Efficiency
Prudent Fiscal Management
STAFF CONTACT:
Stacey Barnier
ATTACHMENTS:
Exhibit A: Proposed Property and Casualty Insurance Coverage Costs