Wildwood Gives, Not Takes

WILDWOOD – Just like in the real world, in the world of insurance there are givers and there are takers. According to Thomas Byrne, of the J. Byrne Agency, the city’s insurance provider, the municipality’s loss rate of 92 percent over the past six years is below the average municipal loss rate of 97 percent, making the city a net giver.
Byrne told City Commissioners at their Nov. 28 meeting the JIF (Joint Insurance Fund) evaluates municipalities on net givers and net takers. He cited the example of a municipality paying a $1,000 premium and having a claim of $1,500. “They call you a net taker.” He explained over time, every municipality is a net taker.
Net givers are defined as municipalities which pay more than what their insurance claims are.
Byrne presented the city’s Risk Managers Stewardship Report and Annual Overview to City Commissioners as part of regular meeting.
The municipality joined the Atlantic County Joint Insurance Fund (JIF) in 2003, said Byrne. The JIF was formed in 1987 when several municipalities banded together in order to bring down the cost of insurance premiums.
“They all pool their money together and they pay each other’s losses,” said Byrne. “If Sea Isle has a claim, Ocean City says ‘Ouch.’”
Byrne said the local JIF currently has a surplus in excess of $10 million. The city is also a member of the statewide MEL (Municipal Excess Liability) fund. Their surplus is $15 million.
When the city initially contacted the insurance company to become part of the JIF, there was some trepidation about taking on Wildwood as a member.
“In the beginning, when Wildwood went in, the big question was ‘How can we possibly charge Wildwood enough because they have to have a lot of claims? They’re Wildwood.’”
Over the last six years, the city’s loss ratio of 92 percent is considered very low. Byrne explained the JIF has only paid out 92 percent of what it collects from the city in claims, leaving an eight percent “surplus.”
“The average JIF loss ratio is 97 percent,” said Byrne. “You’ve outperformed the average member of the JIF.”
Contributing to the low ratio is the city’s lost time accident rate. Byrne said the municipality’s average of .59 accidents for every 1,000 hours is below the JIF average of 1.79 accidents per 1,000 hours.
Lost time accidents are defined as serious accidents with the employee leaving work, explained Byrne. “It’s not just a cut finger and a Band-aid,” he said. “It’s someone who breaks a bone and can’t come back to work for six months.”
Byrne attributed a portion of the city’s success in maintaining a safe environment as well as an active safety committee and employee program.
“The JIF did not want Wildwood,” said Mayor Ernest Troiano. “In fact, for years it sort of kept Wildwood out of the mix in some regards.”
“Let’s just say they were skeptical,” Byrne responded.
Troiano noted when the city initially became a member of the JIF it was looked at “kind of strangely at times.
“We made a really strong effort to make sure this city was not an embarrassment to itself or the JIF,” added the mayor. “We worked hard to make sure.”
The mayor said it was important for the public to know city employees were working hard not to create an excess insurance cost for taxpayers.
“Maybe you can clarify something for me…” began Troiano.
“The [Wildwoods] Convention Center does have flood insurance,” Byrne quickly responded, bringing laughter from the audience. Byrne’s retort alluded to Cape May’s newly-constructed $10 million Convention Hall which was found to have very minimal flood insurance.