Agenda Item Wording:
title
Award Contract for Insurance Broker Services - Authorize the City Manager to award a contract to Alliant Insurance Services, Inc. for insurance broker services, at a cost not to exceed $6,110,200 over a five-year period.
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Prepared by: Andrew Guzman, Risk Manager, andrew.guzman@visalia.gov, (559) 713-4335; Shonna Oneal, Administrative Services Director, shonna.oneal@visalia.gov, (559) 713-4053
Department Recommendation: Staff recommends that the City Council authorize the City Manager to award a contract to Alliant Insurance Services, Inc. for RFP 23-24-54, Annual Contract for Insurance Broker Services, in an amount not to exceed $6,110,200.
Summary:
City staff issued RFP 23-24-54, Annual Contract for Insurance Broker Services, to select a firm to serve as the City’s risk advisor and insurance broker. This agreement will appoint Alliant Insurance Services, Inc. (Alliant) as the exclusive insurance broker for the City of Visalia with respect to the City’s property & casualty insurance programs. The initial contract shall be for a twelve (12) month period and shall, at the City’s option and upon mutually agreeable terms, be renewable annually thereafter for four (4) consecutive one-year periods.
Background Discussion:
City staff purchases multiple lines of insurance to protect the city’s assets, operations, and employees. The current coverage includes:
• Commercial Property
• Underground Storage Tank (Pollution coverage for fuel tanks)
• Aviation Liability
• Excess Workers' Compensation
• Crime Policies for Employee Dishonesty
• Cyber Liability Insurance
The City has historically worked with Arthur J. Gallagher & Co. (“Gallagher”) for broker services. The relationship with Gallagher has been longstanding and was originally with Buckman-Mitchell Insurance (“BMI”), which was acquired by Gallagher in 2018. The City continued to work with Gallagher based on the longstanding relationship.
In the past several years, the insurance market has entered a “hard market cycle,” which has led to rising premiums, more restrictive coverage terms, and some insurers becoming less willing to quote coverage. The “hard market cycle” is reflective of inflation rates, natural disasters, and insurers becoming less likely to insure. This causes rates to soar and coverage to be more difficult to secure. Because of these reasons, the City believed a competitive procurement process was necessary to review pricing and fee structures, evaluate the service quality, and access to available insurance markets.
On June 11, 2025, the City issued RFP 23-24-54, Annual Contract for Insurance Broker Services. Proposals were due on July 15, 2025. Four proposals were received:
|
Proposer’s Name |
Location |
|
Alliant Insurance Services, Inc. |
San Francisco, CA |
|
Arthur J. Gallagher & Co. |
Visalia, CA |
|
The Baldwin Group, LLC |
Tustin, CA |
|
USI Insurance Services, LLC |
Los Angeles, CA |
Proposals were evaluated based on the following criteria.
|
Criteria |
Explanation |
Weight/Points |
|
Merit of Proposals Submittal / Presentation |
• Proposals submittal thoroughness. Quality and responsiveness of the proposal. |
10 |
|
Knowledge and Expertise of Personnel/Firm |
• Capability of personnel • Firm qualifications • Adequacy of Staff to perform the work |
15 |
|
Understanding of Project |
• Knowledge of services to be provided as described in Proposers project approach |
35 |
|
Record of Past Performance |
• References • Evaluation of size and scope of similar work performed • Ability to work effectively with City staff, other public agencies and related parties |
15 |
|
Cost |
• Evaluation of proposed fee, payment schedule, and any commissions credited toward the annual fixed price fee |
20 |
|
Local Vendor Preference |
• Proposers with a Tulare County Business address |
5 |
|
Total Points Possible |
100 |
Alliant Insurance Services, Inc.’s proposal was determined to be the best qualified after committee review based on the scoring criteria.
During contract negotiations, City staff and Alliant discussed risk control services that would enhance the City’s safety program with the intention of addressing the City’s risks and exposures as an effort to control rising insurance costs. As part of the broker agreement, Alliant Risk Consulting will provide up to ninety hours of risk consulting services at $250 per hour, not to exceed $20,000. An attachment outlining non-billable and billable services is provided as an attachment. These services would represent a proactive approach to loss prevention by identifying and mitigating risks before they result in claims.
Fiscal Impact: The total estimated cost of this agreement is $6,110,200. This amount includes the fixed fee for broker services which totals $292,100 over a five-year period, and the estimated cost to purchase multiple lines of insurance coverage, which will be paid to Alliant and forwarded to insurance carriers, in the amount of $5,818,100. An annual overview of estimated payments is below:
|
|
Renewal Date |
Partial Year |
Year 1 |
Year 2 |
|
|
|
7/1/2025 - 6/30/2026 |
7/1/2026 - 6/30/2027 |
7/1/2027 - 6/30/2028 |
|
Alliant Broker Services Fee |
|
$0.00 |
$55,000 |
$56,650 |
|
Property Insurance |
7/1/2026 |
|
$501,800 |
$526,900 |
|
Underground Storage Tank |
12/7/2025 |
$3,000 |
$3,200 |
$3,400 |
|
Aviation Liability |
7/14/2026 |
|
$65,900 |
$69,200 |
|
Cyber Liability |
11/4/2025 |
$100,000 |
$105,000 |
$110,300 |
|
Crime Policy |
4/27/2026 |
|
$16,600 |
$17,400 |
|
Excess Workers’ Compensation |
7/1/2026 |
|
$320,000 |
$336,000 |
|
Risk Control Services |
|
$20,000 |
$20,000 |
$20,000 |
|
Total: |
|
$123,000 |
$1,087,500 |
$1,139,850 |
|
|
Year 3 |
Year 4 |
Year 5 |
TOTAL |
|
|
7/1/2028 - 6/30/2029 |
7/1/2039 - 6/30/2030 |
7/1/2030 - 6/30/2031 |
|
|
Alliant Broker Services Fee |
$58,350 |
$60,100 |
$62,000 |
$292,100 |
|
Property Insurance |
$553,200 |
$580,900 |
$609,900 |
$2,772,700 |
|
Underground Storage Tank |
$3,600 |
$3,800 |
$4,000 |
$21,000 |
|
Aviation Liability |
$72,700 |
$76,300 |
$80,100 |
$364,200 |
|
Cyber Liability |
$115,800 |
$121,600 |
$127,700 |
$680,400 |
|
Crime Policy |
$18,300 |
$19,200 |
$20,200 |
$91,700 |
|
Excess Workers’ Compensation |
$352,800 |
$370,400 |
$388,900 |
$1,768,100 |
|
Risk Control Services |
$20,000 |
$20,000 |
$20,000 |
$120,000 |
|
Total: |
$1,194,750 |
$1,252,300 |
$1,312,800 |
$6,110,200 |
The broker service fee covers existing lines of coverage that were included in the RFP. A risk assessment will be performed as part of the transition process to a new broker. There is no additional cost to the City for the risk assessment. If new lines of coverage are identified that were not included in this RFP, Alliant will limit compensation to 10% commission, which is lower than most of the existing commissions charged to the City by the current broker.
Prior Council Action: N/A
Other: N/A
Alternatives: Not recommended.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize the City Manager to award a contract to Alliant Insurance Services, Inc. for insurance broker services, at a cost not to exceed $6,110,200 over a five-year period.
Environmental Assessment Status: NA
CEQA Review: NA
Deadline for Action: NA
Attachments:
Attachment 1: Alliant’s Proposal
Attachment 2: Alliant’s Addendum - Other Negotiated services as part of Broker Agreement
Attachment 3: RFP 23-24-54 Annual Contract for Insurance Broker Services