A joint insurance procurement initiative within the Victorian water industry has led to substantial savings for 19 Victorian water organisations. The initiative has saved the industry an estimated $6.9 million in insurance costs, while improving the quality of policy coverage.
Led by a Steering Committee made up of Risk Managers across the Water Corporations, including Yarra Valley Water, Melbourne Water, South East Water, Grampians Wimmera Mallee Water, Western Water and East Gippsland Water, the initiative is an example of how working together can equate to substantial savings across the total industry.
The three year agreement with Insurance Broker Jardine Lloyd Thompson Pty Ltd (JLT) was secured through a conceptual tender process, requiring the 19 water organisations to develop a comprehensive underwriting submission for a selected group of Insurance Broking firms.
The group developed best practice policy wordings, attended presentations and liaised with industry experts on the most effective strategies for marketing as a group the 19 individual insurance programs as a combined premium pool.
Yarra Valley Water’s Safety & Risk Manager and Steering Committee Chairman, Frank Portelli, believes this industry collaboration was a first for the water sector and meant the savings achieved would ultimately help benefit customers.
“We’ve seen water organisations work together in the past on joint procurement projects, however this is the first time the whole Industry has come together to really benefit,” Mr Portelli said.
“The saving far exceeded our initial expectations and is a great example of not only industry collaboration but also leveraging off market conditions.”
“This approach made us really look for innovative ideas and in this case we were able to secure the best outcome for both business efficiency and cost,” he added.
Damian Schinck, Managing Director, JLT Corporate Specialty said, “Offering an industry-wide approach created the unique opportunity to design an insurance program through analysis of the risk profiles and existing coverages of each individual corporation.”
“The end result was a uniform ‘industry best practice’ program, created in a highly cost effective and administratively efficient manner,” said Mr Schinck.
“The role of the Steering Committee was extremely important in the success of the delivery of the program. The Committee greatly assisted in analysing issues and options then facilitating speedy decision making by all 19 corporations at critical times during complex and time constrained phases of the process,” he added.
Industry expert firm Inscon Pty Ltd was also engaged to assist in the administration of the tender, to bring industry insights and market knowledge to the table.