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CONSIDERATION OF AUTHORIZATION FOR THE PURCHASE OF PROPERTY INSURANCE FROM AFFILIATED FM IN THE AMOUNT OF $121,379 FOR THE CITY OF NORMAN FOR THE PERIOD OF OCTOBER 1, 2014 TO OCTOBER 1, 2015.
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BACKGROUND: The City of Norman self-insures against most risks (i.e., workers compensation, vehicle/equipment damage, employee health benefits, tort claims, etc.) but historically has purchased insurance to cover casualty losses to City buildings and contents (including electronic information technology/computer equipment). This insurance is purchased in a blanket amount but is limited to agreed-upon values of independent buildings and contents, and is subject to a deductible.
In the past, the City of Norman bid out its buildings and contents insurance. However, several brokers expressed their frustration with this method as insurance underwriters will only work with the first insurance broker to contact them and the incumbent broker had already left "place markers" with most of the underwriters. This year the City decided to pick a broker via a Request for Proposal process that would then bid and select the best buildings and contents insurance for the City. This is the method other cities in the metro use to select insurance products including the City of Oklahoma City.
The City of Norman sent out Request for Proposal number 1314-49 on February 26, 2014 for insurance broker services. One broker responded, Arthur J. Gallagher & Co. (Gallagher). Gallagher is the incumbent broker the City has used for several years and has provided quality bids and rates in the past. Management has been pleased with their services.
DISCUSSION: Gallagher received one bid for the up-coming policy year of October 1, 2014 to October 1, 2015 from Affiliated FM which is also the City's incumbent underwriter. Affiliated FM is rated as A+ by A.M Best and is one of the largest property and casualty providers in the industry. Another underwriter expressed intere...
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