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MCIT consultant warns rising property values, reinsurance costs are driving county coverage increases
Summary
An MCIT risk-management consultant briefed the Clay County Board on reinsurance pressures, rising insured property values, cyber and workers-compensation trends and county risk-management efforts that helped lower work‑comp costs.
An update May 13 from the Minnesota Counties Intergovernmental Trust and Clay County risk staff highlighted rising property valuations, higher reinsurance costs and county efforts that have reduced workers’-compensation experience ratings.
Joe Siminski, a risk management consultant with MCIT, told the board MCIT is a joint powers entity formed by counties to provide tailored risk-management and claims services. “We are a joint powers entity formed by the counties and associated members to provide risk management, and, and, claim payments,” Siminski said.
Siminski said the pool is facing upward pressure on property-insurance costs caused by a steep rise in total insured values and higher reinsurance pricing from the global market. MCIT has taken steps to blunt the immediate premium impact by raising retention levels for casualty and workers’ compensation reinsurance, moves he said reduced the pool’s reinsurance premium increase. “We increased our retention in casualty or liability claims from $850,000 to $1,000,000. That saved a 21.5% increase in the reinsurance premium,” Siminski said.
He also reported positive developments: MCIT was able to return a work-comp dividend to members this year based on improved work-comp outcomes, and ransomware claims have fallen materially after concerted prevention efforts. “Most of that is due to the fact that we’ve had a drop in ransomware claims,” Siminski said. “Eighty-five to ninety percent of the claims with cyber start somehow with email. So, email filtering and beefing up systems and training members to keep away from click bait is what everybody’s doing.”
County staff presented local risk-management work done since 2023, including a county risk-management policy, quarterly risk assessments and an MCIT administrators group that coordinates claims and coverage updates across departments. County risk staff credited the MCIT relationship for coverage and loss-control guidance and said the county’s sustained safety efforts contributed to favorable workers’-comp experience ratings. “These numbers are phenomenal and you should be happy about that,” Siminski told the board, referring to Clay County’s experience-mod factor below 1.0.
MCIT technical notes covered equipment-breakdown coverage enhancements through Hartford Steam Boiler and the value of annual property appraisals to set insurance values. The consultant warned that global reinsurance pricing and sharply rising construction and replacement costs make property coverage the largest near‑term budget pressure for public entities.
Commissioners asked about the practical implications for the county budget and were told to expect modest premium increases tied to the reinsurance market but also to factor improved loss-control performance into long-term budgeting. County risk staff said they will continue to use MCIT resources, safety committee work and quarterly assessments to mitigate exposures and track claim trends.
