If your county has felt the sting of rising insurance premiums in recent years, you’re not alone. Severe weather, cyberattacks, multi-million-dollar lawsuits and more have affected public entities across the country.
The evolving insurance market is complex, and public entities face several challenges in managing their risk profile. To help keep insurance rates as low as possible, county governments must take proactive steps to manage property and liability risks, thereby reducing their overall claims.
What’s driving the insurance market?
Kelly Flores, Deputy Director of Underwriting Services for the Texas Association of Counties, says the four most prominent factors contributing to the current state of the global insurance market are:
- Increased frequency and severity of claims
- Social inflation/rising jury verdicts
- Cyber threats
- Natural disasters
“These have been common players and put a lot of pressure points into the underwriting landscape when it comes to pricing books of business,” Flores said.
While those market factors also affect individual property owners and private businesses, the risk landscape for public entities is even more challenging. Budgetary pressures, regulatory requirements, workforce needs, cybersecurity risks and aging infrastructure can lead to counties and other public entities being more susceptible to insurance losses.
“Not all of our members have the funds available to keep up with property and infrastructure maintenance like we would hope they would,” said Sherry Barbosky, Underwriting Manager for the County Risk Sharing Authority of Ohio. “When assets begin to deteriorate, the likelihood of property claims increases as well.”
Managing risks
Barbosky and Flores both stress the importance of public entities actively looking for ways to control their risks and losses through sustainable and innovative practices.
“Risk management is crucial,” Barbosky said.
When an underwriter is assessing your county, a lower risk profile will lead to better rates.
“When we’re talking to our county members, we are wanting them to differentiate themselves. What are you doing to mitigate your losses?” Flores added.
KACo’s Safety and Loss Control Department is committed to assisting all members of the KACo All Lines Fund (KALF) and the KACo Workers' Compensation Fund to identify, address and correct adverse loss exposures to personal injuries, liability exposures and property losses.
For more information about safety training, grant opportunities or an on-site visit from a loss control specialist, contact KACo Safety and Loss Control Manager Michael Ray at michael.ray@kaco.org or (502) 223-7667.
Kelly Flores and Sherry Barbosky presented a market update for public entities at the July 2024 conference of County Reinsurance Limited, of which KACo is a member. Click here to view their presentation slides.
