1. Why it Works, How it Works, and What’s in it for you Kathy Johnson, Risk Mgmt. Strategies Erin Green, Greendale School District The Wisconsin Educators Risk Management Co-op WERMC

2. What Is Needed 1.Interested Carriers  Competition between carriers is key  Underwriters often don’t like “pools”  Some carriers don’t like groups  Carriers don’t like having to take all districts  Carriers who’ll give extra service and/or savings  Carriers’ coverage & claims philosophy that “fits”

3. 2. Carriers-What Makes a Carrier Interested?  Opportunity for profitability Up-front savings short-lived if losses don’t support the premiums “Soft” or “hard” market drives pricing and service  Insuring districts that have the “right” attitude  Pricing each district independently

4. 3. Coverages Included  Casualty: liability and Workers’ Compensation  Other coverages-any carrier  Crime  Property  Boiler  Pollution for storage tanks  Cyber Liability

5. 4. Membership of Districts Who  are interested in “joining”  are interested in saving money  are committed to long-term service and savings  are willing to do Best Practices  will attend meetings to learn from speakers and each other  will share concerns and what they learn  want to learn how to do “it” better  And Biz Managers who are willing to serve

6. Pros and Cons of a Co-op Pros 1. Education/training 2. “Extras” from carriers 3. Carrier relationship 4. Resources 5. Power of profitable premium 6. Consultant to guide and advise 7. Long-term attitude allows negotiation Cons 1. In “soft” market, higher dividends “out there” 2. Success depends on participation and sharing of purpose 3. Realties of local politics and getting buy-in

7. Advantages to School District  Safety consultant assigned to your district  Possible discounted attorney rates  Informational seminars/training  Ability to receive liability premium discount  Risk consultant’s assistance with issues and purchase/renewal of insurance  Power in numbers (negotiate “extras”)  Resources to make your job easier

8. To Get Buy In:  Do an annual risk management report to the board to provide education, while considering or after joining  Stress the buying power of 35 districts= $4.5 M of premium vs. small district on own  Point out possible gaps if insurance not the best available  Point out areas of possible large losses, such as labor law issues, W/C --needing expertise  Stress this is “proactive” management of risks

9. A Co-Op: Consider This  Look at the stability of the premium (liability/E &O) over time with chosen carrier  Consider “extras” carrier will provide due to power of premium or usual practices  Look at short term gain (one year premium savings on bid) vs. long-term stability of premium/comprehensive coverages and services  We are all busy…so… put effort where the payoff is, which you will learn thru a co-op’s resources and education

10. A Co-Op Offers Value:  Ensures broad coverage and “extras”  Ensures limits adequate for the exposure  Long-term plan for best pricing and risk management Best Practices  W/C: Creative dividend structure related to loss history to ensure longevity

11. District Realities  Political or relationship realities with agents/carriers  Perceived competition with a “recommended” carrier  Complexities of Biz Officials understanding commercial lines of insurance (apples to apples)  Difficulty of explaining complexities to Superintendent/Board