How Risk Pooling Benefits Local Government in Australia

In 1988, insurance companies began receding from the local government sector, introducing significant challenges for councils. The withdrawal left councils challenged in seeking placement of insurance for certain protection.

In response, councils pooled their risk initiatives and related funding to address the insurance coverage gaps and achieve a workable form of protection. This is known as risk pooling and is a consolidated insurance strategy where multiple entities combine resources to spread and manage exposure collectively. With all members cooperating, each council is able to increase control and management over claims through shared mitigation experiences. This in turn allows for improved insurance portfolio management, which contributes to obtaining better long-term premiums.