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IHL approves insurance renewals; staff says property market improving though high deductibles persist
Summary
The IHL board approved a package of insurance and disaster‑response contracts covering property, cyber liability, disaster response and student health insurance, while staff and broker briefed trustees on market improvements and lingering high deductibles for water and wind/hail losses.
The Institutions of Higher Learning Board voted to approve a group of system‑level insurance and disaster‑response contracts after staff and the board’s insurance broker described an improving property market but persistent high deductibles.
The board approved renewal of the property insurance program arranged through FM‑affiliated carriers; a one‑year cyber liability policy with a Lloyd's of London syndicate; a four‑year disaster response services pool with multiple vendors; and the student health insurance program with UnitedHealthcare for the coming policy year.
Why it matters
David Buford, IHL director of risk management, and Jeff Estes, the system’s insurance broker, told trustees the market has shown increased capacity and improved premium outcomes compared with the prior year. "We are seeing an increase in capacity, and we are seeing an improvement in the property market," Estes said. However, Allen staff and the broker emphasized that high deductibles remain the system’s principal concern: water‑damage deductibles that had risen to $2.5 million were negotiated down slightly to $2.25 million, and a 3% wind‑and‑hail deductible remains in place for much of the portfolio.
Key details from the briefing
Buford credited recent mitigation work, appraisals and the creation of a director of facilities maintenance position at IHL for helping the renewal. He said disaster mitigation contracts and improved data reduced insurer assumptions and helped the renewal process. Estes described the market as "bifurcating," with admitted carriers offering more capacity at flat‑to‑single‑digit rate changes and excess/ surplus markets (London/Bermuda) improving but still layering coverage across many carriers.
The renewal summary in the packet cited a roughly flat overall renewal for the FM‑affiliated program with system total insured values just under $15 billion and a flat effective rate of 0.074 per $100 of TIV; overall premium across programs was approximately flat to down slightly. The broker said coastal accounts were seeing premium reductions of 10–20% in recent renewals but wind/hail percentage deductibles and elevated water‑damage deductibles remain common across the market.
Other approved items
Trustees approved a one‑year cyber liability policy at a premium of $520,000 with Beazley syndicate (Lloyd’s) to provide breach‑response coverage and pre‑negotiated vendor rates. The board also approved a four‑year disaster response services agreement with a list of vendors (VMS CAT, Knight Restoration, Leonine, North Star Recovery Services, Paul Davis and ServiceMaster Recovery Management) not to exceed $10 million, which institutions may use on a preferred‑vendor basis after a loss. Trustees also approved renewal of the student health insurance plan with UnitedHealthcare at corrected policy pricing of $2,454 per policy for an estimated 3,200 insured students (total premium roughly $7.9 million as stated in the packet).
Board action and recusal notes
Trustees Martin and Clark recused themselves from items 1–4 earlier in the finance agenda; the remaining trustees approved the bundled insurance and vendor items by voice vote.
Ending
Board staff and the broker said continued mitigation efforts and improved loss experience will be critical to negotiating lower deductibles in future renewals. Trustees asked staff to continue reporting loss‑history trends and mitigation progress in future renewals.
