TITLE
Recommendation to authorize City Manager, or designee, to purchase property insurance for City of Long Beach buildings, contents, and vehicles through the Alliant Insurance Services, Inc., Property Insurance Program (APIP), for a total premium not to exceed $5,807,948, and purchase of earthquake insurance (difference in conditions coverage), at a premium of $144,000 with the Insurance Company of The West, for the period of July 1, 2022 to July 1, 2023. (Citywide)
DISCUSSION
The Human Resources Department requests City Council authorization to renew “all risk” property insurance and earthquake insurance coverage. As the property market continues to harden with the market capacity being cut, there are fewer carriers willing to write the coverage and premiums have increased. Carriers are being more conservative in deploying limits on any risk. The commercial property market is continuing to go through a market “correction” because losses are significantly eroding their profits. Many of the catastrophic losses that were seen in 2017 through 2022 such as wildfires, hurricanes, hailstorms, and floods, continue to include higher than expected loss development. The Coronavirus pandemic has also added to the challenging market. In addition to an already difficult market, the City of Long Beach (City) has a higher-than-average property five-year loss ratio. As a result of the loss ratio, the City is expected to receive up to a 25 percent loss rate increase. The City’s broker, Alliant Insurance Services, Inc. (Alliant), has approached the market with a comprehensive tactic seeking coverage in the current APIP program as well as outside.
Property Insurance
Through its property insurance broker Alliant, the City annually purchases “all risk” property insurance to cover perils such as fire, vandalism, and wind damage to City buildings, contents, and vehicles. This insurance provides coverage for all risks, subject to exclusions and limitations. The proposed prop...
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