Churches see lower insurance premiums for second year

e-Review Florida United Methodist News Service

Churches see lower insurance premiums for second year

By Erik J. Alsgaard | Dec. 8, 2008 {0949}

LAKELAND — Make it two years in a row that good news has come early to Florida Conference churches. For 2009 that good news can be summarized as “50-20-10.”

The numbers reflect a 50 percent reduction in automobile insurance premiums, a 20 percent reduction in workers compensation premiums and a reduction of 10 percent for the total cost of insurance coverage for 2009.
The cost of insurance premiums allocated to the more than 750 conference churches in 2009 will decrease by more than $1.6 million from 2008 costs, according to Mickey Wilson, Florida Conference treasurer, and Mark Thomas, director of the conference’s Ministry Protection department. This follows a record drop in 2008 of more than 22 percent, or more than $3.9 million, from 2007.

During the last two renewal periods, total insurance costs have decreased by nearly 30 percent or $5.5 million dollars.

“In a time when the economy is on everyone’s mind, this is welcome news,” Wilson said. “This continued drop will mean that more money will be available for the ministry of making disciples of Jesus Christ for the transformation of the world.”

The exact percentage will differ from church to church, Thomas said.

“It all depends on variables such as if the church purchased new vehicles, increased the value of its buildings or built new facilities,” he said.

In terms of dollars spent on property and casualty insurance premiums, the conference allocated $19.2 million in 2007 and $15.3 million in 2008. In 2009 that amount will be $13.7 million.

Thomas said his office spent months working closely with Arthur J. Gallagher Risk Management Services, the conference’s insurance broker, on this year’s premiums. Gallagher solicited 69 quotes for the insurance package from major insurance companies in worldwide markets to ensure the conference was getting the most competitive price possible in an ever-changing and difficult commercial insurance market.

Wilson and other conference representatives sat down face to face with the insurance carriers to negotiate for the second year in a row. Thomas and his staff personally met with the major conference property insurer, based in Boston, on five separate occasions this year alone.

“This interaction continues to foster the personal relationship that the conference and its insurance carriers enjoy, which helps with controlling insurance premiums, as well as ensuring prompt claim payments in the event of a loss,” Thomas said.

Once all the options and quotes were received, they were thoroughly reviewed and discussed by the conference’s Ministry Protection committee.

During the last two renewal periods, the amount allocated for Florida Conference property and casualty insurance premiums has decreased by nearly $5.5 million.

“The excellent leadership from outgoing committee chair Roger Bond, as well as the new committee chair, Rev. Steve Price, and the expertise and diligence by the entire committee, was crucial in the decision-making process,” Thomas said. Price serves as pastor of Harvest United Methodist Church in Bradenton.

Another notable outcome of the insurance program renewal is that automobile and other vehicle insurance premiums — except 15-passenger vans — will be cut in half in 2009.

“Each line of coverage was analyzed separately by the Ministry Protection department, as well as by an independent actuary,” Thomas said. “It was determined that, based upon the excellent loss ratios, the premiums could be significantly reduced.”   

Churches still using the high-risk, 15-passenger vans will not benefit from this reduction, however. Instead, insurance premiums for those vehicles will increase from $4,000 to $5,000 per vehicle. It’s an attempt, Thomas said, to reduce the number of 15-passenger vans in use by conference churches.

“Just in the past year, we’ve reduced the number of 15-passenger vans in our fleet by 50 percent,” Thomas said. “This is a testament to the outstanding effort and attention that local churches have placed on this serious safety issue. Our goal is to have zero churches using these vehicles.”

Thomas also said the conference cannot guarantee coverage for 15-passenger vans will be available in 2010.

Workers compensation rates will also be reduced by 20 percent for 2009. This follows a multi- year downward trend, which has shown rates decreasing by 37.7 percent over the last three years.

“While there is much work to be done in continuing to keep the frequency and severity of workers compensation claims going downward, it was certainly appropriate to pass the rate reduction on to conference churches,” Thomas said.

Again this year the conference continued a loss prevention and safety program that offered local churches a complementary insurance and safety “audit.” Thomas and loss control representatives from Arthur J. Gallagher evaluated church buildings and grounds, looking for ways to prevent claims before they happen.

“The more claims and accidents that can be avoided, the stronger the insurance program becomes and the more opportunity for continued premium reductions,” Thomas said.

In explaining the reductions for 2009, Wilson pointed to several factors, not the least of which was the lack of a major named storm hitting the state this year.

“Yes, we had Tropical Storm Fay, which caused flooding and damage that people are still recovering from,” Wilson said. “But from a national property insurance standpoint, the damages to our churches and other property were minor.”

Wilson said churches can look forward to fewer dollars going to insurance companies and more staying at home.

“I love our insurance carriers, but I’d much rather have our money going for our ministry than to them,” he said.

News media contact: Tita Parham, 800-282-8011,, Orlando

*Parham is managing editor of e-Review Florida United Methodist News Service.
**Alsgaard is director of communications for the Florida Conference.

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