Orillia is jumping into the pool — the new Simcoe County insurance pool.
The pool is being offered by Axxima, an independent risk/insurance management and actuarial consulting firm; the insurance pool promises significant savings over the status quo.
Axxima, specializing in self-insurance, was hired by the County of Simcoe to look for costs savings and protection from erratic premium and deductible increases. Its study revealed a "strong business case" to move to a new model of insurance.
Currently the City of Orillia and all other Simcoe County municipalities have individual municipal insurance policies through commercial companies. County municipalities are currently paying more than $20.64 million, combined, per year in insurance premiums.
Axxima is currently making the rounds to Simcoe County municipal councils with a presentation offering savings and greater stability. The deadline to sign up is March 1 with a five-year commitment. The program will be launched later this year.
Carrie Green, chief operating officer, principal of risk and insurance management services, made a presentation to Orillia council at its last meeting.
"We are here due to the rising costs of insurance premiums," she told council.
Axxima is offering self insurance. The county's member municipalities would essentially be its own insurance company governed by a board of directors. Each member municipality would have one voting member on the board and there would be five or six staff, including a manager, to handle the day-to-day tasks working locally.
"Insurance is expensive. Self insurance has a lower cost. We are saving money and coverage will be at least as good if not better," Green said.
Expected savings are to be 19.2 per cent versus the status quo in years one and two and up to 25.9 per cent in year six and beyond, she explained.
That translates to a $1.5 million surplus in the first two years and a $4.3 million in savings over the status quo, Green said. Surpluses belong to the municipalities in the pool, she added.
“We are saving because we are moving a portion of the premium from for-profit-insurance to non-profit insurance,” she said.
“We are also able to see some efficiencies because we are reducing the broker commissions. We are going from 18 separate policies to one, so we are going to see some efficiencies there,” Green said.
Coverage will be a single policy where each municipality pays a premium and deductibles and has access to the highest limits of coverage.
Orillia's cost for "general insurance coverage" for 2025 is $961,000 plus applicable tax, said Melissa Gowanlock, the city's manager of communications.
"There is no buy-in cost for the pool founding members, as each municipality is leveraging their current premiums to enter the pool," explained Gowanlock, noting the term “buy-in” was referred to potential future members that may need to “buy” into the pool to pay their share associated with value and required pool equity.
The cost for insurance through the insurance pool for the first year of operation would be $862,000, which includes the insurance premium for the insurance pool coverage, other specialty insurance coverage not covered by the pool and the city’s allocation to pool equity.
Orillia treasurer John Henry said Orillia wouldn't see a savings until the second year, because the city will have to pay a penalty for breaking its current insurance provider.
"We will break even, which is good because we've flat-lined our budget," Henry told council.
Henry said the city will save $120,000 to $180,000 a year up to year five. A full savings of 25.9 per cent in year six would equate to $310,000.
Mayor Don McIsaac said the program is "weighted to the front end of the policy."
The number of municipalities in the county which have signed on isn't yet known, but Green said it's beyond 50 per cent, so the program has "exceeded critical mass" in order to be feasible.
The pool in Simcoe County will be the first one set up in the province in 25 years. A municipal insurance pool has been operating in the Waterloo region since 1998 and in Durham Region since 2000.
Coun. Ralph Cipolla asked the presenters how much Orillia carries for its liability.
Green responded saying all member municipalities will have the same liability limit and said every municipality would have access to $20 million.
Orillia council voted unanimously to move forward with the Simcoe Municipalities Insurance Pool by Axxima.