We all know the havoc that 2020 wrought upon our state, country, and world. Natural disasters such as wildfires out west and economic disasters such as COVID-19 have led to drastic rate increases in the property and casualty insurance marketplace, and for our Conference as well.

"We're part of a worldwide insurance market," Interim Treasurer Craig Smelser said. "That's why the wildfires and other disasters affect us. Unfortunately, we face an incredibly large increase in premium costs this year."

That increase is almost $2 million for 2021, bringing the Conference insurance costs to about $11 million. However, the Conference decided not to pass that increased cost down to the local churches.

Instead, the Conference will absorb the increase, by paying the additional costs from investment gains in 2020. This decision is guided by our belief that every dollar that each local church spends on insurance is a dollar it can't spend on ministry.

This is very important to us,” Department of Ministry Protection Director LaNita Battles said. "We faced many challenges in getting to this point. The insurance market is cyclical and is extremely volatile right now. But fortunately, the Conference was in a position to absorb this added cost this year, and we are happy we can do that."

The Conference insures more than 600 churches with a total property value of $2.4 billion. Our insurance costs are driven by property insurance, general liability which includes pastoral counseling, workers compensation, cyber liability, terrorism, misconduct, and automobile exposures.

Our program is very sophisticated and complex, using several layers of insurance companies to accomplish our goals. Our coverage program even includes medical insurance for people on mission trips in case they have a health emergency while in a foreign country.

"We want our churches to concentrate on ministry, because the local church is needed more than ever," Smelser said. "People are hungry and need assistance with rent. The local church needs to be there for them, and we do not feel that passing this insurance increase on would be helpful to the churches as they seek to recover from 2020."

Acquiring coverage and managing all the claims and miscellaneous risks is a year-round job for the Conference Ministry Protection staff. It includes the regular insurance reports our churches file with the Conference, gathering and analyzing updated data, and eventually taking our program to the marketplace.

"LaNita has done a great job in managing our insurance program, and in educating our churches on how to limit risks, such as replacing an old roof for instance," Smelser said.

Her work resulted in considerable savings for the Conference.

"Yes, this is a large increase for us, but we've seen folks around the country renewing at 30% increases and more," Battles said. "Our increase is 18%, and that's on top of a large increase in the prior year." 

After sustaining increases in each of the past three years there may be some good news on the horizon.

"We can't say this for sure, but we do we feel the market has settled down," Smelser said. "We'll be watching it for sure."