Gloucester County Begins an Innovative Way to Procure Insurance By Pooling Savings Anticipated to Reach over $1 million by 2012
(Woodbury, NJ) - Gloucester County Freeholder Director Stephen M. Sweeney announced today that the county's agencies will all now join together to procure insurance for vehicles, buildings, workman's compensation, liability and other non-medical coverage. The move to become a self insured' Gloucester County Insurance Commission is expected to yield up to $1 million in savings as this commission evolves.
"Gloucester County will pool our resources to procure insurance in a new way to save taxpayers' dollars," stated Freeholder Director Sweeney. Sweeney said that all in all, the county, the college, the library, the authorities and the GCIT and Special Services School District had a total of 58 (fifty-eight) different policies purchased from 17 (seventeen) different insurance companies from eleven different insurance brokers.
"As government leaders we have to find better ways to get the job done with less," said Freeholder Director Sweeney. "Initiatives like this are about changing the old way of doing business to a more cost efficient way of working for our taxpayers."
Sweeney said that instead of the county, the college, and libraries all having separate insurance carriers and policies for buildings, vehicles and other insurable items, that the agencies will pool their coverage together to procure insurance, loss prevention services and claim managements on a "shared" basis and obtain better rates through economy of scale.
"The level of insurance we have will not be reduced, with some coverage increased, but the overall cost of insurance for the county and its agencies will be reduced," said Director Sweeney. "We anticipate an annualized savings of $430,000 for 2010 and to reach up to $1 million in savings by 2012 by changing the way we procure insurance," the Freeholder Director stated.
Gloucester County and Camden County joined together to partner in creating the first NJ County Excess Joint Insurance Fund in the state. Through creating the Gloucester County Insurance Commission, a system similar to a municipal joint insurance fund, Gloucester County can combine purchasing of its insurance on a group basis for efficiency, resulting in higher limits of insurance, broader coverage templates and better pricing structures going forward.
Sweeney said that with so many different carriers involved among the various agencies, there were a variety of methods used to manage claims and no consistent process. "The Insurance Commission will have a standard methodology for handling claims. We expect this to result in long term savings to the taxpayer because claims will be managed more effectively across our collective organizations," the Director said.
The potential for a greater savings is also a real possibility. Under the old system, when the county or its affiliated entities had good loss years, the insurance companies earned all the profit. The new approach allows the County and its affiliates to retain their own underwriting profit.
The first five members of the Gloucester County Insurance Commission include: Gloucester County, Gloucester County College, Gloucester County Improvement Authority, Gloucester County Utilities Authority and Gloucester County Library System. Gloucester County Special Services School District and Gloucester County Technical School will begin on July 1 to coincide with their fiscal year and when their current policies expire.