| | | | | | | | | City of Independence | | AGENDA ITEM COVER SHEET |
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| | | | | | | | Agenda Title:
Council action is requested to accept Lockton Companies proposal with a one (1) year agreement, with four (4), one-year renewal periods for Property and Casualty Insurance Agency/Brokerage Services with Lockton Companies for the Finance & Administration Department.
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| | | | | | | | Recommendations:
Council action to accept the agreement.
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| | | | | | | | Background:
The City utilizes a broker to market and place insurance. Among the types of insurance the City uses includes property and casualty for all of the City's governmental and business type buildings and operations; excess workers compensation; Directors and Officers; liability; vehicle; large equipment; drone, volunteer; and cyber security coverage. The City's current contract for broker is with Lockton Companies. Lockton works closely with the City’s staff and outside risk management consultants, Charlesworth Consulting.
Periodically, Finance & Administration Department (F & A) reviews the marketplace to see if the level of service received are at the level needed and are priced appropriately. F & A requested proposals to provide insurance agency/brokerage services to the City.
The Procurement Division issued a Request for Proposals (RFP) for this service on October 27, 2020. The RFP was published through the Public Purchase e-procurement website, which notified four-hundred seven (407) potential respondents; Thirty-seven (37) accessed the RFP. Six proposals were received in response to the solicitation: McGriff, Seibels & Williams of MO, Inc., Lockton Companies, IMA Financial, HUB International, CBIZ Benefits & Insurance Services, Inc., and Arthur J Gallagher & Co. These proposals were reviewed by a panel of City staff members and the City’s risk management consultants facilitated the review process. The proposals were evaluated on several criteria including experience, price, capabilities, references and selection process (overall responsiveness and quality of the proposal, including interviews). After interviewing Arthur J Gallagher & Co and Lockton it was determined Lockton submitted the best value proposal.
Lockton’s account team is experienced with the various risks of the City from utilities, police, fire and other vital public services, all of which are located in Kansas City. Their team has experience with all of the City’s incumbent insurance carriers and Lockton has a long history of providing the desired services to the City of Independence. The pricing was consistent with other proposals received. |
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Fiscal Impact:
Up to this point, Lockton has been compensated on a commission basis, and in 2020 received over $200,000 in commissions for placing the City’s insurance. As part of the RFP process, Lockton agreed to move away from the pure commission compensation and agreed to a partial flat fee, with any commissions applied to the maximum fee. This compensation structure will save the City over $75,000 annually.
The fiscal impact to the City will be $120,000 to be paid from the City's Risk Management Fund (093-4293). The Risk Management Fund is an internal service fund and charges back to operating departments. The risk management charges are included in the City's 2021 budget.
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| | | | | | | | | Department: Finance & Administration | Contact Person: Bryan Kidney |
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| REVIEWERS: | | Department | Action | | Purchasing Division (Finance Department) | Approved | | City Clerk Department | Approved | | Finance Department | Approved | | City Managers Office | Approved | | City Clerk Department | Approved |
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| Council Action: | Council Action: |
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