Ashland insurance rate dips 15 percent

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June 20, 2009

By CARRIE STAMBAUGH The Daily Independent Sat Jun 20, 2009, 11:04 PM EDT

ASHLAND — Insurance rates for the City of Ashland are expected to decline 15 percent in the coming fiscal year.

The city is projecting a combined savings of nearly $130,000 next year on liability, property and workman’s compensation insurance, City Risk Manager Jeff Walters said.

City officials are scheduled to meet twice in the coming weeks — at 1 p.m. June 29 and at noon June 30 — to discuss insurance proposals for the fiscal year beginning July 1. The city’s current policies expire July 1 and officials have not decided whether to renew with current carriers or change companies.

Although the city has not committed to specific policies yet, Walters said, the cost is projected to be approximately $358,000 for workman’s compensation and approximately $377,000 for property and liability insurance or $735,000 for both policies. During the current fiscal year, the city paid $865,483 for liability, property and workman’s compensation insurance.

The city’s liability and property insurance is currently through the Putnam Agency, which is the agent for the Kentucky League of Cities, Walters said. Wells Fargo underwrites the city’s workman’s compensation insurance and is the agent for the Kentucky Employers Mutual Insurance.

“We’re (the insurance committee) just trying to decide who is the best for the city, who has the best package,” Walters said.

Walters attributes the decline in premiums to a number of factors. The most tangible, he said, is the decline in the city’s experience modification rates. For 2010, the rate dipped close to 17 percent from 1.25 to 1.42.

“It is a number that is assigned to us to help figure out what we should be charged for compensation on our workman’s comp,” Walters said.

There are several variables insurance companies use to assign the city a number, he said.

“One would be the number of injuries, another would be how big that claim may possibly be. They also use your history to figure your modification rate,” Walters said.

Walters became risk manager in July 2007, filling the position that had been vacant for several years. He said the modification rate is most likely being reduced because the city’s number and severity of workplace injuries and subsequent workman’s compensation claims have been declining.

“I think the big thing is employee participation in our safety program. I think that has been the mover and shaker as far as our injuries,” Walters said.

When Walters took over he wrote an employee safety manual and began having monthly safety meetings with employees. The city has also put into place a more aggressive return to workplan, which also reduces the amount paid out through workman’s compensation.

Walters said he also believes the current economy is helping to bring costs down.

“I think the economy has made the insurance companies a little leaner and a little meaner and I think they are being as competitive as they can,” he said.

Whatever the reason rates are declining, Walters said, he hopes to continue the trend.

“I’m absolutely working toward that,” he said. “My goal is to get it down much, much lower.”

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