City shifts to local insurance agency for Workers Compensation Insurance

The Cairo City Council voted 4-0 Monday night to accept a proposal from a local insurance agency for Workers Compensation Insurance, ending a decades long relationship with the Georgia Interlocal Risk Management Agency/Georgia Municipal Association’s self-insured fund.

Representatives of Southern Insurance of Cairo Hansell Bearden, Dustin Thomas and Chuck Thomas appeared before the council this week to make a pitch for the business.

In order to obtain its loss experience to have the opportunity to bid out the insurance, the city had put GIRMA on notice in September, which satisfies the 90-day notice to switch coverage in 2021 to the local firm.

Southern Insurance will write the city’s coverage through BITCO Insurance Companies, an A+ rated firm that is a member of the Old Republic Insurance Group, one of the nation’s 50 largest publicly held insurance organizations.

The Southern Insurance proposal is for $162,965.00 and the 2021 premium through GIRMA was $182,420.00, down from $212,255.00 in 2020.

Chuck Thomas told the council that he and his agency would work with the city to lower the annual premium even more.

“We’re beating their price pretty good already, but price is not everything,” Chuck Thomas said.

The veteran local insurance broker said he would put his experienced, talented staff up against any in the state; his coverage was the best for the city; his agency’s service was the best possible; his firm is an employee-owned company based locally; and the proposed rate was favorable to the city.

“If you don’t have the coverage, the service, and company to back it up the price is not that important. You don’t owe me the business because I’m local, but at $30,000 below premium that’s $300,000 over 10 years local taxpayers could save,” Chuck Thomas said.

According to Chuck Thomas, last year the city had 53 claims that he said if properly managed should have been five. He said the city should not make claims of less than $2,500, which is the city’s deductible.

Chuck Thomas said the city would report the incidents to the insurance company to put them on notice, but those claims would be paid directly by the city.

Hansell Bearden noted that as a member of a pool or association the city was liable for the debts and liabilities of the association. Chuck Thomas said that if the city has a 30 percent loss ratio and another member of the pool has an 80 percent loss ratio then Cairo is subsidizing the other city.

“What we are bringing you is the highest rated company and a true insurance product,” Chuck Thomas said.

“It sounds like you are guaranteeing us a reduction in premium if we go with you,” Councilman Jerry Cox commented.

Chuck Thomas said he was confident over the next few years Southern Insurance would be able to reduce the city’s Workers Compensation Insurance premium even further.

Councilman James H. (Jimmy) Douglas said his preference would have been to issue a request for proposals to open it up to any other local insurance agents to submit a proposal.

Chuck Thomas said that no other local agency can write the coverage the city needs, no one in Bainbridge and only two in Thomasville. He said he had been seeking the opportunity to write the policy with the city for more than 10 years, but that city leaders, as well as other local government officials, had believed the best route was through their associations’ self-insured pools.

Councilman Douglas, a former member of the Grady County Board of Education, challenged that assessment and said at one time no company was interested in writing policies for cities and school systems.

“I’m for giving you a chance and if you don’t live up to what you say I’ll tell you next year we’re going back with GMA,” Councilman Douglas said.

The city’s premium expense has fluctuated from $136,855 in 2016 to a high of $212,255 in 2020. Likewise the city’s loss experience has ranged from $361,000 in 2016 to a low of $5,000 in 2018.

On a motion by Councilman Cox and a second by Councilman Douglas the council voted unanimously to accept the Southern Insurance proposal for 2021. Councilman Demario Byrden was absent Monday night.

In addition to the city, Southern Insurance was successful in writing the Workers Compensation Insurance coverage for Grady County for 2020 and earlier this year the Grady County Board of Education also switched its insurance program for Workers Comp Insurance to the local firm.