An insurance pool is a multiple-member, risk-sharing arrangement where government organizations pool their funds together to finance an exposure, liability, risk or some combination of the three. Rather than purchasing insurance, employee benefit and risk management services share funds to procure services and insurance as a group through traditional insurance providers, pools and cooperatives.
- Pricing stability: Pools can often purchase higher limits of insurance at a lower cost.
- Leverage: The power of group purchasing creates broader coverage and more favorable terms for members.
- Customization: Insurance pools offer member-driven services that include risk control, claims management and training.
- Innovation: Pools have developed unique coverage offerings.
- Ownership: Members own the pool, including any surplus/equity if losses are lower than expected.
- Flexibility: Pools respond to individual members’ needs through deductibles, varying SIR levels and special coverages.
- Control: Members are more involved in key decisions such as claims resolution, funding levels and services.
- Do you seek to participate in shared services?
- Would you benefit from higher insurance limits?
- Do you have a desire to benefit from the decreased profiting of an insurance company?
- Would it benefit your organization to see a reduction in the volatility of the insurance market at renewal?
Visit the Public Sector Knowledge Center to access an article from our Benefits and HR Consulting team on benefit cooperatives, a form of insurance pooling specifically designed to meet the needs of public entities: “Employee Benefits Cooperatives: From Concept to Application.” This whitepaper and many others are available on important topics in your sector.
After review of your specific risks and risk financing needs, your Gallagher team will present you with recommendations for your unique circumstances. If insurance pools are appropriate, we will walk you through the process. Insurance pools can be very beneficial, but they can also be very complex. Pools can have layers of coverage — insurance, excess insurance, reinsurance and different deductibles for different members. Our team has the knowledge and experience to assist you in the intricate process of negotiating and structuring an insurance pool.
Additionally, our Public Sector Practice also offers the option to handle the pool administration. In this role, we will provide risk assessment and loss control services, exposure data management, cost allocation, claims review, loss review, third-party claims administration, issuing certificates of insurance and contract review.