Victorian Auditor-General Andrew Greaves has targeted local councils’ use of mutual insurance schemes in a report criticising their lack of tendering.

Most councils in the state use the Municipal Association of Victoria (MAV) insurance scheme for public liability and professional indemnity cover, which is administered by broker JLT.

But the Auditor-General suggests significant savings could be made by councils prepared to put their insurance requirements out to the private market.

The MAV and JLT disagree, pointing to a lack of consultation in preparing the report and the use of an adviser with a direct financial interest in the outcome.

JLT Public Sector Global Head Leo Demer told insuranceNEWS.com.au the vast majority of councils use mutuals for a reason.

“Excluding the ACT, 96.5% of councils are members of a mutual for some of their insurance requirements,” he said.

“At the June renewal period, councils in mutuals received minimal premium increases, whereas councils not members of mutuals were forced to bear increases of up to 65% as insurers withdrew from the market. 

“The private market comes and goes, but the mutuals are always there.”

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