Agenda item

Councillor Roger Ramsey, Cabinet Member for Value, introduced the report

The report informed Members about the options available to the Council when the main insurance contract expired at the end of December 2012.  It was proposed that the current contract should be extended for two years from that date and approval was sought for this action.

Reasons for the decision:

1.         The option to extend the contract for two years was chosen as rates would be guaranteed for the whole duration of the extension.  The 5% reduction in rates offered provided savings to the Council before the end of the contract. 

2.         The quality of the service provided by Zurich Municipal was considered to be very good and strong and effective working relationships existed.

3.         It was advantageous to have consistency in Insurance providers as there was a significant resource cost in tendering and in transferring insurers should an alternative provider or providers be selected.

4.         Risk Management activities including projects to consider risk tolerance and appetite, future insurance needs of services and the costs/benefits of tendering smaller lots needed to be explored more fully before the Council returned to the market to tender for a replacement provider.

Other options considered:

1          The option to extend for one year was disregarded as this did not provide sufficient negotiating advantages.

2          The option to extend for three years or more was disregarded because rates could not be guaranteed and market conditions were hard to predict.  Extending for the contract for two years would not prevent the Council negotiating a further extension - up to the five year term originally proposed, if this was considered at the time to be in the Council’s best interests.

3          The option to re-tender was disregarded due to the cost of the exercise and the market information provided by the broker.

Cabinet:

1.                  NOTED the options considered.

2.                  APPROVED the two year extension to the contract with Zurich Municipal from 1 January 2013.

3.                  NOTED the savings achieved and how this expenditure could be redirected.