Along with other North Simcoe neighbours, Midland opted to join a proposed Simcoe municipalities insurance pool at the recent committee of the whole meeting.
Presentations by Axxima Insurance Services had been making the rounds in Penetanguishene and the townships of Tay and Tiny over the past months, along with other municipalities across the region, offering a means to save on rising municipal insurance costs.
The pitch was to offer a municipal insurance pool for Simcoe County, as had been established by other regions such as Waterloo Region and Durham County over 20 years ago.
Estimated for 2025 was $22.4 million in Simcoe municipality insurance costs, for which $20.6 million would be allocated to insurance premiums as the status quo with under $1.8 million to municipal deducible losses. Through the proposed pool program, just $18.1 million would be paid in ($8.4 million for pool retention; $7.7 million for excess insurance premium; $2 million for municipal deductible losses).
For Midland specifically, a five-year total direct savings of over $1.1 million would be had by the town, with just under an additional $920,000 in accumulated equity within the pool for a potential five-year savings of $2 million.
Within the meeting, Mayor Bill Gordon noted that the big risk that was the “elephant in the room” was “a staggeringly huge claim” that could be made against one municipality in the pool which could evacuate funds, “because of one municipality’s mishap, whether they earned it or not.”
On hand to field the question was CIO and principal broker Ryan Durrell of Axxima Insurance Services, who replied that a thoughtful structure wouldn’t destabilize the pool, but would retain predictably large volume of losses and use the insurance marketplace to take care of very large uncertain claims.
“If there's a very large lawsuit for example, $15 million, first of all each municipality would continue to have its own deductible like it has today,” said Durrell, as municipalities would stay accountable and have stake in claims. “Then the pool will take the difference between $500,000 and that deductible, and then the insurers will continue to carry that $14.5 million.”
Gordon noted that the town utilized legal and risk program manager Julie Ellery to renegotiate aggressive discounts for insurance, but “a lot of small urban municipalities don't have ‘Julies’ and they rely entirely on external legal to help them manage those things”.
With an assurance that over half of the 18 invited Simcoe County municipalities had joined into becoming founding subscribers of the insurance pool, the committee of the whole also approved signing on.
The municipal insurance pool staff report with Axxima presentation is available in the council agenda on the town of Midland website.
Council meetings are held every third Wednesday, and can be viewed on Rogers TV cable channel 53 when available, or through the livestream on the Rogers TV website. Archives of council meetings are available through Rogers TV and on the Town of Midland’s YouTube channel.