The University will save $4.6 million over the next five years after the Board of Supervisors voted unanimously Friday to allow the University to manage its own insurance.
Daniel Layzell, vice president for finance and administration, said the University met performance targets under the Granting Resource and Autonomy for Diplomas Act, which allowed it to gain autonomy over its insurance program.
Layzell said currently the University’s insurance is managed by the state and bundled with other state agencies’, resulting in higher premiums for the University. John Borne, executive director for the Office of the Chief Information Officer, said when the University is lumped in with other state agencies, the cost is spread across all departments.
The University can save money by opting out of the state insurance because the University is considered a “protected risk,” Borne said. The protected risk classification means the University is not as susceptible to certain kinds of risks other state agencies have to consider with insurance calculations, he said.
Police departments are at a higher risk than the University and thus have higher premiums, Borne said. He said other state agencies might be on the coast, leaving flood and hurricane concerns.
The University has its own set of specific concerns factoring into its insurance calculations, Borne said. Research at the University, students and faculty traveling and the presence of 28,000 students make the University’s insurance situation unlike others, he said.
The University has much to gain and little to lose from the shift, Borne said. Although the University now holds the responsibility of handling its insurance, Layzell said the shift in autonomy allows the University to “control its destiny,” giving it an incentive to become more strategic in its decisions.
Layzell said the next operation the University will likely pursue autonomy for is purchasing, which would give the University more control over how it procures office, research and construction supplies, among other things. He said the move would bring potential for even more savings and overall efficiency.