The benefit of competitive tension in risk and insurance*
Good governance in local government and procurement suggests that the insurance market should be tested regularly.
Tendering brings competitive tension into play, which invariably drives down prices, even if the incumbent retains the contract. In addition to boosting financial sustainability and stability, tendering provides ratepayers with transparency about the way their council strives to achieve best value.
Understand your options to achieve value for money
1. Review your current insurance program, including the scope of your actual coverage.
2. Understand procurement options within the commercial market and request an independent insurance benchmarking service to identify potential savings.1
3. If required, issue a Letter of Intent to your current insurer before the end of the next fund year, thus keeping open your options to tender if you choose to.
4. Develop a fit-for-purpose insurance program with coverage, loss limits and deductibles that are appropriate to your council’s unique circumstances, and issue a Request for Tender.
5. Make an informed decision based on best value, not just price. This includes assessing the quality and quantity of risk management and insurance services provided.
6. Deliver benefits to your community by redirecting any savings to fund programs and projects.
7. Review and reassess your insurance program on a regular basis.
For further information, contact Paul Crapper, Aon’s National Head of Local Government, on 61 3 9211 3313 or paul.crapper[@]aon.com
1 Aon offers a complimentary and obligation free benchmarking service to all councils. Please contact us for further details.
*Copy supplied by AON