R2020-125 Resolution Authorizing Property and Liability Insurance Coverage for the City of Decatur Illinois for the Policy Period October 1, 2020 to October 1, 2021

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City Of Decatur Gallagher •CORE 360' Arthur J.Gallagher Risk Management Services,Inc.appreciates the opportunity to present this proposal for your consideration. Mr. Gregg Zientara City Treasurer&Director of Finance City of Decatur One Gary K. Anderson Plaza Decatur, IL 62523-1196 RE October 1, 2020 Insurance Program Renewal Dear Gregg, As I sit dow n to w rite this 2020/2021 Executive Summary, it is Week 25 of working from my home office due to the outlook of COVID-19. During the past 5.5 months, w e have had to deal with the Global Pandemic Coronavirus. It has effected all of us in our w ork,play and social aspects of our lives.Who w ould have thought that in 2020 the catch phrase of the day w ould be"social distancing". As Gallagher continues its 30-year plus relationship w ith the City, w e truly value the partnership w ith the City and look forw and to continued success for many years to come. As outlined during our pre-renew al meeting, the insurance marketplace continues to harden. We continue to see significant rate increases on property,casualty and cyber coverages. On the property coverages,insurance carriers are continuing to pay on catastrophic claims such as fires,floods and tornadoes. In the Midw est, insurance carriers are running convective storm analytic reports for severe storms, floods,w ind and hail exposures.What this means to you is that the insurance carriers reinsurance costs continue to increase and those increases are being passed onto insureds as rate increases and limit reductions. The average property rate increase for clean risks w ith little loss history averages 30%to 40%. Risks w ith claims are seeing minimum rate increases of at least 65%and higher. The casualty marketplace is seeing the effects of social inflation. Social inflation is increased costs due to rising litigation w hich results in larger jury verdicts. For our municipalities that means carriers are seeing more suits involving excessive force under law enforcement, large auto liability claims, large public officials claims involving alleged sexual harassment, and employment practice claims. Concerned w ith the litigation environment being favorable to plaintiffs,carriers are pushing rate increases, limit reductions, and coverage exclusions. In regards to the City's package policy renew al,our team not only w entto our incumbent carrier, ADC Specialty Insurance Company, and we also explored various self-insured pool options for the municipality. We approached the Illinois Municipal League, MICA, and CIRMA. All of these cooperatives provide coverage to municipalities on a self-insured basis. Based upon the quotations w e received from each pool, it is our recommendation that the city renew their package policy w ith our current carrier ADC Specialty Insurance Company. Based upon previous law enforcement claims, and the addition of a number of transit (busses)units midyear, our carrier has given us a very competitive renew al. In regards to the City's excess property coverage renewal,our long term partner, the Travelers Insurance Company, has given us very competitive renew al terms w ith a slight rate increase w hich is in line w ith the current marketplace. The cyber liability market is very volatile for public entities, especially during this time of pandemic. Ransorrw are demands to municipalities are a constant. During the past year,many municipalities have had serious ranson-w are and hacking issues.Our renew al limit of$1,000,000 for cyber coverage renew al premium is relatively flat.We also secured alternative limit quotations for $3,000,000 and $5,000,000 limits. It is our recommendation that the city increase their cyber limit for this renewal. 3