As I mentioned in my covering letter as well as in the letter you received with your renewal packages, our combined efforts put our program in a favourable position to negotiate with insurers on rates and coverage. So we focused our negotiations this year on correcting insurers perceptions of risk in social housing in Ontario and how it’s handled. Specifically:
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We also took a different business approach with insurers. We approached insurers in both North America and Britain and offered insurers the ability to share in underwriting the property component of the insurance program. So instead of having one property underwriter, who absorbs all the risk, we have more than 10, who distribute the risk amongst themselves and thereby lower their exposure. The result of this was that we had unprecedented interest among insurers in the program and enabled us to obtain a competitive program premium and coverage enhancements.
HSC calculated insurance premiums based on an allocation model that aims to be fair, transparent and supportive of good risk management practices. As in previous years, the allocation model factored in:
However, this year it also factored in:
Renewal Results Highlights:
A note on providers that did experience increases:
Approximately 60 providers did see increases in their insurance costs. However in the majority of these cases, the increased costs were because their insured building values had risen. The value of your buildings can increase in several ways: by having building values re-assessed after a long period; by increasing the number of insured units; or by adding new locations or providers to your insurance policy. However, it is important to have updated building values since they determine how much you are eligible to receive in the event of a covered loss.
The remainder experienced increases for the following reasons:
I am committed to working closely with providers who have challenging recent claims histories to assist them in controlling costs and reducing risks into the future. And as I mentioned in my letter, I plan to make efforts in moderating insurers’ views on the extent to which tenant support services create liability exposure.
Should you have any questions about your insurance costs or seek advice on how to better control them, please do not hesitate to contact me.
I plan to provide you a final update on the status of the 2012/13 Stream A and Stream B Property Claims Trust Funds (Claims Funds) before the end of the year in the next Managing Risky Business. However as I mentioned in the letter that went out with your renewal paperwork, there’s been an important policy development on the Claims Fund.
Your Insurance Advisory Committee has approved a set of rules to ensure that funds are properly managed. Any surpluses left in the Claims Funds at the end of a policy term will be returned to participating members six months after the end of the term – once all outstanding claims are fully settled. The surplus would be divided among providers based on the percentage of the provider’s initial contribution to the Fund.
The purpose of a Claims Fund is to cover smaller, more common property claims so that insurers can focus on less common, catastrophic claims. As such, it helps control premium costs by absorbing what would otherwise be claims costs and risk exposure incurred by the insurer. Because the size of the Fund is based on its projected use (and this has been fairly accurate in the past two years), we cannot expect surpluses. However utilizing the claims fund data to refine our risk management practices could over time improve the possibility of a surplus. And now we have process for administering any possible surpluses.
While disasters aren’t pleasant to talk about, they can help us get new insights into risk management and lend perspective to the human and economic cost of claims. Here are just some of the stories on incidents at participant sites reported in the news:
On a more positive note, I was pleased to recently read about the work that Supportive Housing of Waterloo is doing on addressing hoarding. They’re working with other local community groups to “build relationships with clients and network with partner agencies in order to not only address the underlying issue of why someone is holding onto things, but also how to reduce harm to the individual, their family and the broader community.” You can read the story here: http://www.waterloochronicle.ca/news/the-hoarding-project/
If you’re working on a way to control risks that might be applicable to other providers, I’d like to hear from you! Please feel free to contact me.
Training & Education
There are several educational opportunities this fall related to risk management:
For more information on these sessions and registration details refer to the ONPHA conference guide.
I am also happy to visit providers to get together with front-line staff to educate them on practical risk management. Should you be interested in hosting such a session or to arrange for the custom delivery of HSC training in loss prevention or mould and asbestos remediation, I’d be more than happy to arrange it. Please feel free to contact me.