What is Public Sector Risk Pooling

What is Public Sector Risk Pooling?

Public Entity Risk Pooling is the single most successful example of inter-local cooperation in North America and beyond, saving billions of taxpayer dollars and thousands of lives.

Beginning in earnest some 30 years ago, it is a success story that grew organically from the inability and unwillingness of much of the traditional insurance industry to understand and address the changing risk dynamics of governmental entities.

Today, AGRiP estimates that 80% of the cities, towns, schools, counties and special districts in the United States address some or all of their risk management and risk financing needs through these member-owned, member-governed, non-profit pools.

While each pool is unique, most share certain key characteristics. Intergovernmental risk pools are formed under state-specific legislation allowing for joint “pooling” of resources to address risks ranging from property loss to employee benefits, tort liability, workers compensation, and more. Pools are owned and governed collectively by their member entities, who share in the costs and savings that derive from their activity.

They are non-profit and mission-driven, with the goal of improving safety and reducing risk and its related cost. This provides budgetary stability and predictability for the member entities and, ultimately, their constituents and taxpayers.

For more information, see “Public Entity Pooling - Built to Last" a paper submitted in achievement of an Associate in Risk Pool Management (ARPM) designation by Karen Nixon, CPA, ARM, with the Public Entity Risk Sharing Authority of California.