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Insurance renewals push premiums up; district reports gains from new investment strategy
Summary
Committee heard a renewal summary showing increases in property and workers' compensation premiums driven by higher property valuations and payroll growth; investment manager reported a $50 million long‑term reserve established last year has appreciated to about $53.7 million with a yield of about 4.33 percent.
Plainfield SD 202’s Site & Finance committee on May 14 reviewed several district financial items, including insurance renewals, vendor contracts and an update on a newly established long‑term investment portfolio.
Marsh McLennan and PMA representatives joined the committee to summarize the district’s property and casualty insurance renewal and the district’s investment performance. Marsh McLennan noted that property and workers’ compensation premiums increased for the renewal year; staff attributed the primary drivers to higher reported property values and to payroll increases used in workers’ compensation premium calculations.
“One of the main drivers of the increase of the workman's comp was due to salaries,” a broker on the call said, noting district payroll growth to meet market pay targets raised the comp premium base. Committee members also noted that claims counts have not risen dramatically and that some premium increases reflect valuation and payroll reporting rather than a sudden spike in incidents.
On investments, the district’s external adviser reported the district set aside a roughly $50 million long‑term portfolio in March last year and that the portfolio’s market value was about $53.7 million as of March 31, generating an annualized return near 6.5 percent for the first 12‑month period and an average yield of about 4.33 percent versus a 4.12 percent benchmark. The portfolio is diversified across government, agency/mortgage‑backed and corporate securities and has a duration near 3.7 years.
Committee members discussed that long‑term laddered portfolios historically outperform shorter maturities over long horizons and that the district’s approach — segregating long‑term reserves and short‑term cash for operations — is intended to reduce volatility and preserve liquidity while capturing higher yields where appropriate.
The committee recommended forwarding insurance renewals and vendor contract approvals to the full board for action; no final district vote on policy changes or renewals was taken at the committee meeting.
