T-R PHOTO BY ROBERT MAHARRY Shomo-Madsen Insurance President Bobby Shomo addressed the Marshall County Board of Supervisors about their EMC policy renewal during Wednesday morning’s meeting. The board voted unanimously to accept the renewal with a premium rate increase of 19.42 percent, meaning the county will pay $758,448.28 for coverage during the upcoming fiscal year.

When Shomo-Madsen Insurance President Bobby Shomo stepped to the speaking podium during Wednesday morning’s Marshall County Board of Supervisors meeting, he didn’t intend to be the bearer of bad news, but as he subsequently explained, it’s simply a challenging time to be in the business.

“I might be looking to take one of those county positions that (County Engineer) Paul (Geilenfeldt) has offered right now. The insurance industry is not a lot of fun right now,” Shomo said.

At the beginning of 2023, there were three carriers in Iowa specializing in insuring municipalities and other government entities, and one of them — Continental Western — pulled out earlier in the year and left “a great number of municipalities” with no insurance. Marshall County is insured through EMC, and Shomo said he also works with Jasper County, which works with the other remaining provider, the Iowa Communities Assurance Pool (ICAP).

He then noted that ICAP is no longer willing to accept any new customers with property values in excess of $25 million — well below what Marshall County has — and added that he was happy to be able to bring coverage at all with the EMC quote of $758,448.28 for the upcoming fiscal year, an increase of about 19.42 percent from the current premium of $635,107.28. The county’s insurance policy covers property, business auto, general liability, crime/fidelity, inland marine, umbrella, linebacker, law enforcement, worker’s compensation, cyber liability and the deductible buy down for the courthouse and jail.

Shomo shared more about the state of the market as Farmers Mutual Hail has pulled out of property and casualty insurance completely in Iowa, and in Florida, 17 companies have become insolvent since the pandemic.

“It’s a really, really tough market,” Shomo said.

Recapping a recent article in the Des Moines Register, Shomo, paraphrasing the president of Grinnell Mutual Insurance, cited four primary factors causing the surge in rates: inflation, building material costs, social inflation (jury awards in injury and sexual abuse cases) and weather as storms do more damage and become more unpredictable.

According to Shomo, property rates saw a big increase this year, about eight percent from EMC, which he added probably doesn’t even keep up with inflation. He ran down several of the categories and explained that the modification factor, known as the MOD, by which a standard workers compensation premium is multiplied to reflect an insured’s actual loss experience, is “artificially low,” predicting an unpleasant adjustment in the future.

“Our claims experience has not been good. It’s not getting better yet. We’re working hard at it with our safety group, but for 2023, we’ve had 12 claims submissions,” Shomo said. “I can’t really break them into ‘We have a problem in a certain area or a problem in a certain department.’ We’ve had all kinds of different claims from people checking a radiator while it was still hot and getting burned to people on a ladder turning and having an injury from being on the ladder. I can’t say we have an issue in any one category.”

As the floor was opened up for questions, Supervisor Carol Hibbs wondered if EMC was working with department heads on ways to increase safety and reduce claims, and Shomo said that was the case. County Auditor/Recorder Nan Benson also noted that a special meeting was set for Nov. 1 on that topic.

“You’re gonna have some work comp claims because of the size of the county. You can’t get it down to no claims. We do wanna keep track when we’re having a lot of slips and falls or having a lot of at-fault accidents, following up with some loss control, but boy, the claims just don’t follow a pattern,” Shomo said. “We’ve got claims for lots and lots of different reasons.”

Supervisor Steve Salasek asked Shomo how Marshall County compared to Shomo’s other client in terms of claims, Jasper County, which has a similar population with about 38,000 residents to Marshall County’s 40,000, and Shomo said he would gather information and get back to the board on that.

The problem for most insurance companies, Shomo explained, is that they’re simply spending more on claims than they’re taking in, and as a result, they’re dipping into reserves to pay bills and, in some cases, becoming insolvent and leaving the market. In turn, less competition generally means higher rates for customers.

Board Chairman Jarret Heil thanked Shomo for persevering through a difficult period and continuing to provide the opportunity to have coverage, and Shomo was quick to point out that EMC has treated Marshall County well.

“They’ve spent a lot of money here. I did have the moniker, for a long time, of having the largest claim in the history of the Des Moines branch for EMC. We carried that here in Marshall County for a long time,” he said. “I’m happy to release that now. We don’t have it anymore, but they’ve spent a lot of money on the county and they’ve stayed involved. I’m happy to offer a renewal, and I’m happy to do business with them.”

Salasek recounted feeling as nervous as “a cat on a roof” that EMC would drop Marshall County four years ago after the tornado but was thankful that was not the case. The board then voted unanimously to approve the insurance renewal.

IN OTHER BUSINESS, the board:

• Approved the consent agenda as listed.

• Presented a 10-year service award to Robert Crandon, a truck driver in the secondary roads department.

• Approved the hires of Isaiah Moore, Connor Reyes, Nicholas Ruhnke and Douglas Zobrosky as full-time truck drivers in the secondary roads department. Each will be paid $28.60 per hour.

• Approved a status change for Autumn Canny in the county attorney’s office and raising her pay from $76,299.84 to $88,000 annually as she takes on the grant-funded VAWA felony position.

• Approved a status change for Eric Devig from truck driver 3 to patrolman 2 and a raise from $29.69 to $29.79 per hour.

• Approved a zoning variance request from Joseph Diers and James Wolken.

• Approved a zoning variance request from Robin Wiedner.

• Approved a construction services agreement for the storm siren project with Federal Signal Corporation in the amount of $351,717.

• Approved a six-month lease renewal with the Marshalltown Mall for storage at a cost of $1,433.75 per month.

• Approved three courthouse change orders totaling $6,309.83.

• Announced the official notice to agencies requesting county funding for fiscal year 2024-2025 must be submitted to the auditor/recorder’s office by Dec. 13 at 4:30 p.m.

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Contact Robert Maharry

at 641-753-6611 ext. 255 or

rmaharry@timesrepublican.com.