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Renewal of Excess Liability and Automobile Physical Damage Insurance 2022-2023
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DESCRIPTION: Renewal of Excess Liability and Automobile Physical Damage insurance coverages for policy period 2022-2023 |
AGENDA NO: Click or tap here to enter text. |
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ACTION REQUEST: ☒ Approval ☐ Review Comment ☐ Information Only ☐ Other |
RECOMMENDATION:
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Authorize Kennedy Financial Group of Louisiana, Inc. as RTA insurance broker of record to proceed with the renewal of specified insurance coverages for the policy period 8/1/22-7/31/23.
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ISSUE/BACKGROUND:
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RTA annually renews its Excess Automobile Liability/General Liability [“Excess AL/GL”] and Automobile Physical Damage [“APD”] insurance coverages on August 1st. The policies are marketed and placed by the RTA insurance broker of record, The Kennedy Financial Group of Louisiana, Inc., and provide optimal coverage at the most competitive cost.
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DISCUSSION:
It is necessary that RTA proceed with the renewal of these insurance coverages through the RTA broker of record, The Kennedy Financial Group of Louisiana, Inc., on a timely basis:
Excess AL/GL: Limits $5,000,000; Excess Retained Amount [“SIR”]: Automobile - $1,500,000 per accident; General - $500,000 per occurrence.
Automobile Physical Damage: Total Insured Value [“TIV”]: $85,365,141 covering all RTA vehicles (revenue and non-revenue) with a $65M flood limit and a $25,000 deductible (except for named windstorm and flood at 2% per affected TIV with a per occurrence minimum of $250,000).
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Relative to Excess Liability [“Excess AL/GL”], the total cost for the expiring Excess AL/GL program [2021-2022] was $2,096,108.78.
Underwriters willing to write automobile liability for public transportation entities continue to confront significant losses nationwide. The Regional Transit Authority faces additional challenges because numerous markets willing to write automobile liability for buses will simply not insure streetcars. Further, due to hardened market conditions in an ongoing COVID-19 environment, an increase in premiums is unavoidable.
However, recent improvements in safety, loss control and risk management at RTA have resulted in a lower premium structure than originally anticipated, with the total cost for the Excess AL/GL renewal program [2022-2023] of $2,182,347.90.
This represents an increase of $86,239.12, or approximately 5% over last year’s Excess AL/GL premium, a conservative increase given an uptick in renewal exposures, including recent increases in service and ridership, and the addition of new vehicles to the RTA fleet.
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Relative to Automobile Physical Damage [“APD”], the declining property market has carriers reducing their capacity or pulling out of Louisiana altogether, resulting in significantly higher renewal premiums this year.
The expiring APD insurance for 2021-2022 covered vehicles with a Total Insured Value [“TIV”] of $79,257,726 for a premium of $1,332,365.66 (exclusive of an additional $117,236.00 for endorsements for newly acquired vehicles during the 2021-2022 period).
The current recommended APD renewal for 2022-2023 will cover vehicles with a TIV of $85,365,141, which represents a $6,107,415 increase over the 2021-2022 TIV, for a total APD premium of $1,591,520.25, or approximately 10% over last year’s APD premium.
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Details of the respective coverages can be found in the Resolution and associated attachments.
FINANCIAL IMPACT:
$3,773,868.15
Funds for these contracts and related endorsements are available from the RTA Operational budget:
Excess Automobile /General Liability: 1830002.9131.169
Automobile Physical Damage: 1830002.9132.169
NEXT STEPS:
Proceed with the renewal of insurance coverages as indicated above.
ATTACHMENTS:
• Resolution for Contract Award of Excess Liability and Automobile Physical Damage Insurance Coverages
• RTA Comparison Spreadsheet: 8/1/2022-2023 Insurance: Expiring versus Renewal
• Markets Approached List [Excess AL/GL]
• Markets Approached List [APD]
Prepared By: Marc Popkin
Title: Risk Analyst
Reviewed By: Gizelle Banks
Title: Chief Financial Officer
Reviewed By: Mark A. Major
Title: Deputy CEO, Administration & Finance
7/22/2022
Alex Wiggins Date
Chief Executive Officer