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State of CIRSA 2020

By Tami Tanoue, CIRSA Executive Director

As we jump into 2020, I want to report to you what’s been happening at CIRSA, and what to expect this year.

Membership Renewals

First, 100 percent of members stayed with CIRSA for property and liability coverage this year. And all but three members chose to stay with CIRSA for workers’ compensation coverage as well. Huge thanks for continuing to entrust CIRSA with your coverage and risk management needs.

We are very pleased to welcome some new members for 2020 as well; the City of Evans has joined the PC pool, as have the Roaring Forks Transportation Authority and the Gunnison Valley Transportation Authority. And we’re very happy to welcome back the Town of Ordway, who has come back to both the PC and the WC pools.

Excess Coverage Placements

It’s still a hard market for property, and the liability market is also experiencing a hardening. This means we’re in a seller’s market: the cost of coverage in the excess/reinsurance market is going up, capacity is down, and coverages are being restricted as well. A number of factors have combined to affect CIRSA members this year:

  • Because of the wind and hail losses of the past few years, Colorado is now considered a “CAT exposed” area – a locale where catastrophic property losses are likely.
  • Our liability exposures include some – such as law enforcement – where large claims are occurring nationally and locally. In the past 10 years, our members have had eight law enforcement claims of over $1 million, including one that was recently settled for $8.75 million.
  • Bottom line, excess liability coverage cost substantially more than was budgeted. However, that was offset by excess property coverage being somewhat less than budgeted.

There’s good news, too. Members are doing a great job of keeping their employees safe, as evidenced by the flat (no increase) excess renewal we obtained in workers’ compensation. In liability, at least to this point, our members have had little exposure to sexual abuse/molestation claims, the other liability “hot button” area of concern in the excess market nationally. And while the national (and international) picture for catastrophic property losses has been pretty bleak, at least we didn’t add to our own “CAT-exposed” reputation in 2019, as wind/hail losses were much better than in the previous couple of years.

What’s our Board Been Up To?

We’re fortunate that CIRSA is governed by a smart, forward-thinking group of municipal officials who give their time generously to keep CIRSA moving in the right direction. The Board has recognized that our members are growing in size and sophistication, and that we need to keep evolving to meet your changing needs. To that end, you’ll be seeing an emphasis going forward on loss control services that are tailored to your individual needs and desires, rather than a “one size fits all” approach. We recognize that “one size fits all” claims handling doesn’t fit everyone, either; as members take on increasingly larger liability deductibles, greater autonomy in how those large deductibles are spent is a fair expectation. We’re looking at more options for coverage limits, too.

What’s Keeping You Up at Night? Cyber-Crime, Perhaps?

We’d love to hear from you: what’s going on in the world of risk management that keeps you up at night? What can we do to help?

If we had to take a guess as to the leading cause of many a sleepless night, we would say it’s the growing risk of cyber-crimes. Last year, a couple of our members experienced some nightmarish cyber-related events. One was a “ransomware” event that rendered unusable most of the member’s IT resources. The other was the loss of a large amount of money due to a complex online fraud.

It’s clear that the scale of cyber-crime is growing by leaps and bounds, as is the sophistication of the cyber-criminal. No longer are we just talking about emails purporting to be from the Town Manager asking a staff member to purchase $500 in gift cards (although those remain popular). Our member’s recent online fraud loss was in excess of $1 million.

Our cyber coverages have only been in place since 2015, and until recently, there was very little claims activity in these coverages. But given the large losses our members experienced last year, we will be re-examining the adequacy of the cyber coverages and limits.

It’s Election Season and That Means It’s Elected Official Training Season!

Many of our members had regular elections in November, 2019, and many more will have regular elections this coming April. This means a new group of elected officials, who are no doubt thirsting for training! Please call or email CIRSA General Counsel Sam Light (saml@cirsa.org) to schedule on-site training for your city council or board of trustees. And let us know if you need copies of the second edition of “Ethics, Liability & Best Practices for Elected Officials” publication (or download a copy here).

And summer’s just around the corner! We are looking forward to seeing you at the CIRSA General Membership Meeting during the CML Conference in Westminster. Sam and I are both speaking. I’m doing a session with retired City Manager Ron LeBlanc entitled “I’ve Got 99 Problems and You’re One of Them: Overcoming Obstacles in the Council-Manager-Staff Relationship” on Thursday, June 25. And Sam will be speaking about transparency issues on Wednesday, June 24.

Concluding Thoughts

Finally, thank you for the opportunity to serve you as Executive Director. I welcome the opportunity to chat with you anytime! If you need me to come out to talk to your governing body members or staff, I’m always up for a road trip. (303-757-5475, tami@cirsa.org). CIRSA exists because of you, and to serve you. We always want to know what you think, and how we can do a better job in our role as your risk management partner.

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