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LARM Member News

Focus on Current Risk Management and Insurance Costs

by Dave Bos, LARM Executive Director

The room at the League of Nebraska Municipalities Municipal Accounting and Finance Conference in May was packed when Justin Swarbrick, Senior Vice-President for Alliant Insurance Services, spoke about the rising costs of municipal insurance.

Municipal finance specialists and elected officials from across Nebraska had already been concerned about the rumors of predicted 15-30% increased insurance costs for the next fiscal year. After his presentation, when Swarbrick asked if there were any questions or comments, one participant noted wryly, “You’re not giving us any good news.”

He wasn’t. As a Nebraska-based risk management pool, we at LARM are also seeing the results of billion-dollar disasters, high construction costs, and increased property values. Because of these factors, LARM members have also seen increased contribution rates which is hard to swallow when you’re already putting together tight budgets.

In the past, it might have cost $50,000 to repair a hail-damaged roof on a maintenance building. Now it might be triple that amount. Severe storms and fires that have destroyed vast amounts of property in the United States over the last three years have been detrimental to the insurance industry. If you add all the other wind, flooding, snowstorm, and fire losses across the country, you can see why insurance companies have to raise their rates to pay for those claims.

In the 1980s, public entities faced a similar insurance crisis as rates increased and some policies were even canceled, which is again happening today to some entities with commercial policies. Because of the crisis in the 1980s, the League of Nebraska Municipalities helped a group of Nebraska municipalities form their own risk management pool. In 1995, with 13 participating municipalities, the Nebraska Department of Insurance granted the League Association of Risk Management (LARM) its “Certificate of Authority” to operate a risk management pool. I’m proud to say LARM recently added its 208th member.

Municipalities across Nebraska continue to contact LARM for risk management and insurance solutions. Along with top-notch customer service, LARM also provides loss control services to assist members in identifying and analyzing risks with a goal of preventing property, liability and workers’ compensation losses. We are a pool that exclusively covers Nebraska governmental entities. As we like to say - “We know Nebraska.”

Insurance rates have gone up, and with the rise in interest rates, property values, and inflation, this may be the story for insurance costs in the foreseable future. If you haven’t considered belonging to the LARM risk management pool, now is the time to do so.