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Renewal of Excess Liability and Automobile Physical Damage Insurance
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DESCRIPTION: Renewal of Excess Liability and Automobile Physical Damage insurance coverages for policy period 2021-2022. |
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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To authorize the CEO to renew the specified insurance coverages for the policy period 8/1/21-7/31/22 through Kennedy Financial Group of Louisiana, Inc. as RTA insurance broker of record.
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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, 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 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”]: $79,257,726 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 [2020-2021] was $1,939,725.
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 [2021-2022] of $2,096,109.00. This represents an increase of 8% over last year’s Excess AL/GL premium, a moderate increase in the current commercial automobile liability sector for transportation entities.
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Relative to Automobile Physical Damage [“APD”], a more stable market yields renewal coverage at a cost on par with that of last year.
The expiring APD insurance for 2020-2021 covered vehicles with a Total Insured Value [“TIV”] of $64,478,349 for a premium of $1,098,889.85 (exclusive of an additional $89,437.98 for endorsements for newly acquired vehicles during the 2020-2021 period).
The current recommended APD renewal for 2021-2022 will cover vehicles with a TIV of $79,257,726, which represents a $14,779,377 increase over the 2020-2021 TIV, for a premium of $1,398,733.61. Endorsements for additional vehicle acquisition throughout the upcoming renewal year 2021-2022 have an estimated premium cost of $117,236.00, yielding a total APD premium for 2021-2022 of $1,515,969.61.
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Details of the respective coverages can be found in the Resolution and associated attachments.
FINANCIAL IMPACT:
$3,612,078.39
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 renewal of insurance coverages as indicated above.
ATTACHMENTS:
• Resolution for Contract Award of Excess Liability and Automobile Physical Damage Insurance Coverages for Policy Year August 1, 2021 to July 31, 2022
• RTA Comparison Spreadsheet: 8/1/2021-2022 Insurance: Expiring versus Renewal
• Excess AL/GL Market Approach List
• APD Market Approach List
Prepared By: Marc Popkin
Title: Risk Analyst
Reviewed By: Gizelle Banks
Title: Chief Financial Officer
Reviewed By: Mark Major
Title: Deputy CEO, Administration and Finance
7/22/2021
Alex Wiggins Date
Chief Executive Officer