Communities across WA are to benefit from their Local Governments’ choice to be part of the LGIS insurance mutual.
A recent decision by the LGIS board will deliver up to $9 million in one-off savings to participating Local Governments next financial year.
LGIS is the insurance and risk management services provided by the WA Local Government Association via a management agreement with JLT-Marsh.
WALGA President and LGIS board member, Mayor Tracey Roberts said between $7 million and $9 million would be available to offset costs from a combination of accessing reserves and reducing Scheme capital.
Mayor Roberts said the LGIS Board decision – supported today by the WALGA State Council – would help many Local Governments achieve their ambition of a zero rates increase this year.
“Local Governments are doing a tremendous amount to support their communities during COVID-19 including freezing rates and charges, rent relief and programs to support business and the vulnerable,” she said.
“WALGA has been investigating every possible means to support the sector deliver on these initiatives and led the discussion to free up as much capital as is financially responsible from the LGIS Scheme.”
All but one Local Government in WA are Members of the LGIS Scheme that covers Workers Compensation, Liability, Property and Bushfire Volunteers.
Mayor Roberts said the advantages of the mutual model and the ongoing participation of Local Governments had put LGIS in a position to offer additional support to Councils during the COVID-19 crisis.
“The LGIS board has preferred a conservative approach to the management of the Scheme’s funds and it is the wisdom in that approach and the strength of the mutual which has enabled this response,” she said.
“It is unlikely a commercial insurer would have the capacity, and even less the interest, in these times to offer such an extensive financial boost to its customers as the WALGA insurance service will deliver.”
The final amount of savings to be provided to Member Local Governments will be finalised with the end of year results, however the reserves component will ensure it is at least $7 million in savings.
To provide context for individual Local Governments to estimate their probable benefit from the proposed $7 million to $9 million in savings, last year the LGIS Scheme returned a $6 million surplus to Member Councils.