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DEPARTMENT OF FINANCIAL MANAGEMENT <br /> RISK MANAGEMENT DIVISION <br /> MEMORANDUM NO. 99-098 <br /> September 7, 1999 <br /> TO: The Honorable Mayor and City Council Members <br /> FROM: James L. Williams, �City Manager <br /> Beth Couter, Directo of Financial Management�� <br /> J. Barry Leonard, Risk Manage�� <br /> SUBJECT: Property & Casualty (P&C) Program Renewal <br /> It has been the practice for Risk Management to conduct a competitive P&C program <br /> renewal on a three to five year cycle. Our current cycle means it would have normally <br /> been done in 2000. However, staff was advised of several new approaches by insurers <br /> which prompted us to do it a year earlier. <br /> Staff issued twelve invitations to previously interested parties and received seven <br /> responses. From the seven, four parties were selected to submit responses to an RFP. , <br /> The selection criteria was based on insurance market place access and experience with <br /> municipal insurance programs. One of the finalists withdrew because they felt they I <br /> could not submit a complete program that they felt would be competitive. � <br /> The proposers are AJ Gallagher (AJG), our current provider, AON Risk Resources <br /> (AON) and Cannon Cochran Management Services, Inc (CCMSI). AON is a national <br /> broker like AJG. CCMSI is a regional broker that operates through local brokers, in our <br />' case, through Bennett & Shade of Decatur. <br /> AON is proposing a fully insured or first dollar Workers Compensation (WC) program. <br /> This type WC program will not be more cost effective than our current program. <br /> Without the WC program, AON is not competitive. <br /> AJG is offering an excess Liability limit of $8,000,000 for a total program limit of <br /> $10,000,000. AJG's price for this is significantly lower than CCMSI's. Each proposer's <br /> combined program has the same limits for major items except that CCMSI is not <br /> offering any Crime coverage. CCMSI's Flood & Quake limit is $12.5 MM vs AJG's <br /> $10MM. Several of CCMSI's exclusions are more restrictive and in particular they also <br /> have a Y2K exclusion. <br /> The RFP for support services differences are in pricing not in the services themselves. <br /> AJG had the lowest cost for Claims handling. CCMSI required a minimum annual fee. <br /> Run Off, the har�dling of Claims currently open, appears to have the largest impact on <br />