Agenda item

[Report of the Assistant Director for  Corporate Governance. To be introduced by the Cabinet Member for Corporate Resources.] To seek approval to award the contract for Insurance Arrangements to successful tenderer(s) for the following: Property, Combined Liability, Terrorism.

The Cabinet Member for Corporate Resources introduced the report which set out the procurement process undertaken, via the Insurance London Consortium (ILC), to appoint a provider for Property Insurance Services (Housing Stock, Education and General Properties); Terrorism Insurance Services (Housing Stock, Education, General and Commercial Properties); and Liability Insurance Services with effect from 1 April 2017, for a period of three years with the option to extend for two further periods of one year each.

In response to a question from Councillor Newton, the contract figure could not be included in the public part of the report as, although the tender exercise was managed as a single process by the ILC, all eight ILC members needed to obtain approval from their respective authorities to award their individual contracts. This is in accordance with the ILC’s formal operating agreement, which was approved by Cabinet. Premium costs across ILC members vary depending on claims experience and insured costs. Until authority has been obtained from all ILC members, contract details and premium costs are kept confidential until the successful tenderer has been notified and the statutory standstill period has expired. It was anticipated that all ILC members will have obtained authority to award contracts by 31 January 2017. Details of premium costs paid will form part of the Council’s routine reporting processes as part of the Transparency Coderequirements.

RESOLVED

To approve the award of contracts for the provision of the Insurance Services via the ILC, effective from 1 April 2017, for a period of three years with the option to extend for two further periods of one year each to the following providers: Property Insurance Services (Lot 1) and Liability Insurance Services (Lot 3) to Protector Insurance Limited; and Terrorism Insurance Services (Lot 2) to Charles Taylor Services Limited.

Reasons for decision

The current insurance contracts commenced on 1 April 2014 and were based on a three year agreement with an option to extend by a further two years. The initial three year period will end on 31 March 2017; ILC have decided not to take up the option to extend the contracts and instead to test the market and retender. It is necessary to ensure that the new contracts are in place from 1 April 2017, to avoid any gap in insurance cover for the Council.

Alternative options considered

            Purchasing stand-alone cover for the Council, using agreed procurement processes. This was not considered appropriate because:

·         Haringey Council’s membership of the ILC has enabled it to benefit from significant economies of scale in procuring policies for a number of local authorities; these economies of scale would not be available if the Council were to opt for a single authority procurement route;

·         Membership of the ILC has also allowed the Council to share best practice on insurance and risk management practices, which would not be available on a stand alone basis; and

·         The insurance market for local authority risks has historically had a limited number of competitors. Procuring through the ILC has previously increased the number of providers willing to respond and resulted in reduced policy rates.