Most residents of Connecticut probably don’t spend much time thinking about what sort of insurance is held by the city or town where they live. As a result, they are unlikely to realize that around 90% of all risk management and financing for cities and towns is handled through a single organization, the Connecticut Interlocal Risk Management Agency (CIRMA).
CIRMA was formed in 1980 by the Connecticut Conference of Municipalities after the state passed legislation calling for the creation of an entity to serve the needs of municipal governments, local agencies, boards of education, and other parts of the public sector. At the time many of these organizations were struggling to find insurance that properly met their needs, prompting the Municipal Risk Pool Management Statute, special enabling legislation which created space for CIRMA.
“The statute allows the creation of an interlocal risk management agency that can operate risk management pools, and work as the exclusive insurer of cities and towns, local public agencies and school districts in the state of Connecticut,” explained CIRMA President and CEO David Demchak.
“We’re a member-owned and a member-governed organization,” Demchak continued. “Our sole purpose is to meet the risk management and risk financing needs of Connecticut municipalities and agencies. And we’re unique because our focus is on risk management and financing exclusively for our members and ensuring the stability and availability of insurance in the marketplace.”
According to Demchak, CIRMA does not have any shareholders other than the organization’s members and customers, and that provides unique competitive advantages that allowed for the organization to capture almost the entirety of the market.
“Our focus is to do the right thing for our membership,” he said, noting that this means there is a strong emphasis on training and risk management for members. Without stock prices to worry about and a legal mandate that precludes expanding to other states, CIRMA typically gains the best returns from investments on training for members that can prevent the events that could trigger a payout entirely.
“CIRMA insures about $22 billion worth of municipal property in the State of Connecticut,” Demchak noted. “We spend quite a bit of time working with our members to ensure that we’ve collected actionable information. We are just now completing a four-year enterprise of helping to effectively value those properties to ensure that we have the correct replacement cost values in place. That’s a free service we provide to our members.”
CIRMA has provided extensive training for avoiding cybersecurity threats, situations that could lead to injury, and general disaster preparedness for employees of the many different entities it covers, along with special programs for first responders. Demchak also noted that CIRMA’s data collection has also provided literal protection for some municipal structures.
“We’ve implemented a sensor technology program where we provide sensors on the building so that they can inform the facility of changes in temperature in the building, potential water incursions, changes in moisture, mold risks, and all kinds of other things that allow facility managers in many towns across the state that allow them to take action to prevent a loss from occurring,” he said. “We had a case where our sensors picked up that the refrigeration system in a building wasn’t working properly, so we took that information and alerted the folks to the issue and they were able to save probably six months’ worth of food for a school district from spoiling.”
“I think it’s important for folks to realize that we exist and that the service that we provide to the cities and towns has had a positive impact for a long period of time,” Demchak added. “The work that we do in terms of tailored risk management services and claim services positively impacts the cities and towns and helps them to be better place to live and work.”
