Midland has decided to join a proposed Simcoe municipalities insurance pool, along with other North Simcoe municipalities, following discussions at a recent committee of the whole meeting.

Axxima Insurance Services has presented the proposal to municipalities in Penetanguishene and the townships of Tay and Tiny in recent months, as well as other municipalities in the region. The proposal outlines a strategy to manage rising municipal insurance costs through a shared insurance pool, similar to those established in Waterloo Region and Durham County over 20 years ago.

For 2025, Simcoe municipalities are projected to face $22.4 million in insurance costs, with $20.6 million allocated to insurance premiums and less than $1.8 million covering municipal deductible losses.

Under the proposed pool, municipalities would contribute $18.1 million, including $8.4 million for pool retention, $7.7 million for excess insurance premiums, and $2 million for deductible losses. More than half of the 18 invited Simcoe County municipalities have committed to the pool as founding members.

Midland's participation in the pool is estimated to result in direct savings of over $1.1 million over five years, with an additional $920,000 in accumulated equity, bringing potential five-year savings to $2 million.

During the meeting, Mayor Bill Gordon raised concerns about the financial risk posed by a large claim against a single municipality within the pool, which could deplete shared funds. He referred to this as the "elephant in the room," questioning the potential impact of one municipality's claim on the entire pool.

Ryan Durrell, chief insurance officer and principal broker at Axxima Insurance Services, addressed these concerns by explaining that the pool's structure is designed to maintain stability. Large claims would be managed through a combination of municipal deductibles, pooled funds, and excess insurance coverage.

"If there's a very large lawsuit, for example, $15 million, first of all, each municipality would continue to have its own deductible like it has today," said Durrell. "Then the pool will take the difference between $500,000 and that deductible, and then the insurers will continue to carry that $14.5 million."

Gordon noted that Midland's legal and risk program manager, Julie Ellery, has been able to negotiate insurance discounts, but acknowledged that smaller urban municipalities without similar in-house expertise often rely on external legal support.