Insurance Market

An Example

Imagine you are drafting an introduction to your budget book. Your goal is to explain to the reader some of the high-level goals of the organization. You want them to understand the principals that lead to designing the budget council adopted. Here is the first paragraph you initially write:

“The City’s annual budget is created to reflect the Mayor’s priorities and address community needs each year. The budget process takes place over a five-month period, during which agencies propose new or expanded programs and investments to better serve the public and meet the goals set out by the City. The Budget & Management Office staff assess proposals for their merits across a collection of considerations, with the first among them being the Mayor’s Strategic Framework. This framework, shown in the graphic below, illustrates Mayor Smyth’s dynamic priorities as it relates to creating a world class city where everyone has access to a home, a job, and a content future. The following pages outline key strategies and investments for priority areas and the metrics used to calibrate success.” The score of this text:

128 words

Average word length is 5.2 characters

5 sentences

Average sentence length is 25.6 words

Reading time: 30 seconds Flesch-Kincaid Grade Level: 14 (college level)

This scoring may not immediately cause you concern. If you consider the average level of education in your community, however, you will see the problem. First, only 61.8% of Canadians aged 25 to 34 had either college or university qualifications. Secondly, most people prefer to read a few levels below their absolute maximum comprehension level.

A second draft of the paragraph revised to improve readability:

“The City’s annual budget reflects the Mayor’s priorities and addresses community needs. First, agencies propose new/expanded programs. Budget & Management Office staff then assess these proposals for their merits. This process takes five months. The graphic below illustrates Mayor Smyth’s priorities to create a world-class city where everyone has access to a home, a job, and a future. The following pages outline strategies for priority areas. They also provide the measures used to determine success.” The score of the revised text:

75 words (decreased 53 words)

Average word length of 5.6 characters (increased slightly) 7 sentences (increased by 2) Average sentence length is 10.7 words (decreased by approximately 15) Reading time: 18 seconds (decreased by 12 seconds) Flesch-Kincaid Grade Level: 9

This second version of the text reduced reading time by 40% and made the content understandable to more of our potential audience.

Evaluate the readability of your text and make it as easily comprehensible as possible. Improving readability is one essential and easy step to improving your communication. •

JAMIE BLACK is President of F.H. Black & Company Incorporated. For the last 20 years, he has consulted and trained finance officers, auditors & accountants in government, higher education, and corporations throughout Canada and the U.S. His work focuses on increasing finance department efficiency & effectiveness through the implementation of technology & best practices

What Your Local Government Should Know and Do in a Hard Insurance Market

Local governments have come a long way following the insurance crisis of the mid-1980s. Since then, they have become more appealing to insurers with their attention to risk management, asset management and loss control practices. Despite this, the economic downturn paired with the increase of catastrophic losses worldwide has decreased the capacity many insurers have to take or keep risks, creating a hardening of the market that has driven premiums up dramatically. While the citizens in your communities are facing large premium increases for their strata and automobile insurance, local governments are being hit with significant increases when it comes to their commercial property insurance.

Whether you are looking to renew your insurance policy or buy a policy to cover a new risk, you may face the following challenges:

Premium increases: Many insurers have multiple lines of business and insure areas outside of British Columbia. While a local government property portfolio may be performing well with no losses, in a hard market, large claim payouts in other geographic areas or lines of insurance may have an affect on your insurance rates.

Limited Options: Some insurers are withdrawing from certain markets, leaving fewer insurers available to cover the risks. While insurance brokers actively advocate to provide the best premiums and coverage for their clients, it may be that there are just not enough options available.

Coverage Restrictions: What once was covered, may not be going forward. Insurers will be looking beyond just risk and may want to limit their exposures to loss generally. This means imposing much more stringent criteria in offering policies, adding exclusions to policies, or including conditions that a local government must comply with to get coverage.

In a hard market, it is important to have conversations with your insurance broker in advance of your renewal, and to help them help you by getting them the information they need. Consider doing the following to minimize the impact of increased premiums:

Highlight New Loss Control Measures and

Upgrades: Has your local government installed new signage, sprinklers or anti-theft devices? If so, point that out. These changes may make you more attractive to underwriters.

Review Coverage and Limits: Ensure that you are paying for what you actually need. Many policies include coverage you may not need. Adjusting coverage and limits may provide some cost savings.

Review Deductibles and Consider Self-Insuring:

A hard market is a good time for local governments to evaluate how risks are managed and whether it can absorb smaller losses and increase deductibles. Ask your insurance broker to give you deductible options so you can assess whether the cost savings of a higher deductible outweigh the financial consequences of self-insuring for one or more potential loss below your chosen deductible level.

Whether you are shopping for a new insurance policy or looking for support in navigating the hard market during the renewal process, a good broker is always in your corner. Reach out to the MIABC or your broker to see how they can assist. •

MARINA SEN was appointed to the position of Insurance Services Coordinator when the MIABC’s Insurance Department was created in April 2014. She has played a key role in the development and implementation of the MIABC Property and Ancillary Insurance Program, and the establishment of the MIABC’s brokerage arm, Civic Risk Insurance Solutions. As a licensed insurance broker, Marina provides broker services to the MIABC’s membership, ensuring that all their insurance needs are met. Marina speaks regularly on risk management and insurance topics at various local government conferences and MIABC events and webinars.