The acceleration of insurance cost increases in California is alarming. Insurance rates for property and liability continue to increase significantly year over year, not only for GSRMA, but for all risk pools and carriers in the State. Globally, insurers’ appetite for financing risk, especially in California, has diminished as the size of jury awards and settlement of liability claims skyrocket and insured property disasters, such as California fires, set records. For GSRMA, this has translated to our overall general liability and property rates – that is, the amount we pay for insurance beyond our pooled layer of coverage – increasing over 100% (i.e.  doubling) in two years’ time. And while our workers’ compensation costs are not increasing as quickly, they are increasing. The future costs for all types of coverage will be a challenge for us as carriers continue to exit the California market.

To understand why this is happening and to better prepare for the future, please read these messages from the CEO of PRISM Risk, our excess carrier, regarding the hard-markets surrounding many of our coverage lines:

General Liability

Workers’ Compensation




Additionally, PRISM has created this video in efforts of communicating the current state of the markets:

The good news is that your Agency is a member of GSRMA – a fiscally conservatively run and well-funded California public entity risk pool. We are benefiting from positive loss experience both due to our strong loss prevention incentives and services as well as our experienced and efficient internal claims adjusting team.

For the current year, the majority of member contribution increases were due to the increase of excess insurance costs. We have taken several steps to keep these increases to a reasonable level by making changes to the amount of risk the pool assumes so that excess cost increases are not as substantial as they could be. Property values have increased in the most current year due to inflation and construction costs. In addition, the cost of the property program increased significantly this year as our excess carrier required us to cover more of our risk exposure without decreasing their premium. We will be phasing this additional cost in for our members over the next few years.

We have been able to keep overall rate increases to 18% or less (excluding individual rate changes due to changes in payroll, total insured value and loss experience adjustments) for most members.

Our primary goals with our member cost allocation formula are to keep rates competitive and avoid significant spikes in contribution for individual members. Our members do their part by being risk aware and making use of our extensive risk control and loss prevention services. Pooling is the best place to be when it comes to risk financing and that is especially true in challenging insurance times such as these.