National Academies Press: OpenBook

Shared-Risk Insurance Pools for Transit Agencies: A Guide (2023)

Chapter: Appendix F - Challenges Facing Municipal Shared-Risk Pools

« Previous: Appendix E - Common Objections to Municipal Shared-Risk Pools
Page 59
Suggested Citation:"Appendix F - Challenges Facing Municipal Shared-Risk Pools." National Research Council. 2023. Shared-Risk Insurance Pools for Transit Agencies: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27419.
×
Page 59
Page 60
Suggested Citation:"Appendix F - Challenges Facing Municipal Shared-Risk Pools." National Research Council. 2023. Shared-Risk Insurance Pools for Transit Agencies: A Guide. Washington, DC: The National Academies Press. doi: 10.17226/27419.
×
Page 60

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

F-1   Table F.1 contains challenges and solutions for shared-risk pools. A P P E N D I X F Challenges Facing Municipal Shared-Risk Pools

Category Challenges Implications Economic Any unexpected shift in the overall level of funding due to economic downturns can significantly affect the pool’s financial forecasting accuracy. Member budget constraints. Unlike the federal government, states cannot run operating budget deficits. Premature return of surplus/equity. Find ways of demonstrating value and distinguishing the pool as a benefactor to the state’s economy. Demonstrate how the pool has lowered the total cost of risk, benefiting taxpayers. Political Increased legislative mandates and increased scrutiny of pool operations. Legislature pressure to utilize commercial insurers who pay taxes and vote. Find ways to demonstrate value and distinguish the pool in challenging economic conditions through complementary services and unique adaptation to member needs. Share the pool’s successes and achievements with state legislators by communicating goals and objectives, investment success, and capital/surplus accumulation. Membership Growth and retention. Member satisfaction. Find ways to demonstrate value and distinguish the pool compared to commercial insurance: savings, reduced costs, coverage, control, etc. Survey pool members to ensure that member expectations are being considered and met. Technology Keeping up with technology to facilitate communication and claims management at an acceptable cost. Find ways to fund and demonstrate how technology benefits pool operations by reducing operating costs and claims costs. Competition There can be intense competition from commercial insurers during “soft” commercial insurance markets. Commercial insurance markets continually cycle from “hard” to “soft.” A soft market is one side of the market cycle that is characterized by low rates, high limits, flexible contracts, and high availability of coverage. Find ways to demonstrate value and distinguish the pool as a long-term solution for lowering the total cost of risk. Build in terms and conditions of membership that discourage members from leaving. Help all interested parties understand that commercial insurance markets are always cyclical (“hard” and then “soft”), which creates unstable/unpredictable budgeting and planning for the state. Leadership/ Institutional Maintaining institutional knowledge. Obtaining and retaining informed, committed boards. The loss of institutional knowledge results from the turnover of staff and leadership. Attracting, training, and retaining qualified employees. First, build a specific strategy for maintaining institutional knowledge. If you do not pay attention, the knowledge base of your pool will potentially atrophy. Second, as part of your strategy, identify the few key things that you want every pool member to know or be able to do, and build those items into pool- required training. Third, use technology to create a process that continually captures knowledge essential to pool operations. Table F.1. Challenges and solutions for shared-risk pools.

Next: Appendix G - Vehicle Fleet Loss Mitigations and Loss Reduction Practices and Procedures »
  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  6. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  7. ×

    View our suggested citation for this chapter.

    « Back Next »
  8. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!