Insurance broker recommends higher self-insured retention to cut premiums

Doug Rogers, president of Risk Pros Inc., recommended the Bossier Parish Schools Insurance Committee approve a one-year renewal of the district's liability insurance package with a $300,000 self-insured retention, saying the higher retention produces immediate premium savings that should exceed expected additional exposure over time. Rogers said on the proposed plan that by increasing the district's self-insured retention by $100,000 the district would "harvest premium savings of just under $200,000 in premium." He added, "It is my belief that over time, the board will actually save money by retaining more of this self insured retention." The committee voted to recommend approval to the full board; the motion carried with one opposition and otherwise was approved to send forward for board action. Why it matters: Rogers said retaining more low-level liability claims gives the district and its third-party administrator more flexibility to evaluate and settle smaller claims quickly, which insurers view favorably for underwriting. He also noted the district has averaged fewer than one severe claim per year over the past five years. Details: Rogers outlined coverages included in the liability package (general liability, employee benefits liability, law enforcement liability and incidental medical malpractice) and described a reporting duty to the insurer that triggers at 50% of the chosen self-insured retention, which he said permits earlier evaluation and quicker resolution of small claims. He said the district currently has a $200,000 retention per claim and that selecting the $300,000 option increases per-claim exposure by $100,000 but yields the premium savings described. Committee discussion focused on tradeoffs between immediate premium savings and potential higher out-of-pocket exposure if multiple large claims occur in a short period. A committee member asked whether the premium savings are guaranteed; Rogers said the savings are realized immediately as premium reduction if the higher retention is elected, but ultimate cost outcomes depend on claims activity over time and can materialize over multiple budget years. Next steps: The committee recommended the renewal with the $300,000 retention to the full Bossier Parish School Board for final approval. No formal ordinance or statute was cited in the discussion.