How did the idea of consolidation come about?

Over the years, there has been some interest in the concept of having APEI and AMLJIA work together. As high-cost claims have become more common, the idea of the two pools joining forces to maximize their risk management efforts has made more and more sense.

A decision was made by both pools in December 2022 to investigate the idea of a consolidation, and the legal review was started the following month. Once it was determined that a consolidation was legally possible, and that there were no antitrust issues associated with the pools coming together, they decided to take the next steps.

In the summer of 2023, the AMLJIA and APEI boards of directors each appointed four of their members to serve on a Consolidation Committee to explore a consolidation of the two pools. The committee has been meeting monthly since then, discussing the various issues surrounding consolidation and making preliminary decisions about how to move forward.

Why do the APEI and AMLJIA boards think that

consolidation might be a good idea?

The boards identified several reasons why consolidation could be advantageous for both APEI and AMLJIA members:

  • Economies of scale could allow for savings in costs to the pool and lower premiums for members.

  • Combined staffing could provide enhanced member services.

  • Internally, merging could provide greater staffing depth for positions requiring specific expertise, including claims, loss control, and underwriting.

Who is serving on the Consolidation Committee?

The eight-member Consolidation Committee is made up of Board members from APEI and AMLJIA, supported by the executive directors and deputy directors of the two pools.

Representing AMLJIA

Brandi Harbaugh, Kenai Peninsula Borough

Bryant Hammond, Nome

Joe Evans, Kotzebue

Nils Andreassen, Alaska Municipal League

Kevin Smith, Executive Director

Brennan Hickok, Deputy Director


Representing APEI

Brad Thompson, at-large board member

Lon Garrison, Association of Alaska School Boards

Mark Vink, Bering Strait School District

Melissa Haley, City and Borough of Sitka

Barbara Thurston, Executive DIrector

Carleen Mitchell, Deputy Dirctor


What is the process for the pools to consolidate?

State statutes define the process that must be followed for AMLJIA and APEI to consolidate.

Click on the upper right corner of the chart to review the steps.

Does the new pool have a name?

Yes! It is called the Alaska Public Risk Alliance (APRA), highlighting the unique needs of the municipalities and school districts that the pool will serve. “Alliance” refers not only to the two pools coming together, but to the entities across Alaska that share the risks, responsibilities, and rewards of pooling as APRA members.

If AMLJIA and APEI consolidate, when would it become effective?

If a proposal to consolidate APEI and AMLJIA is made and approved,

consolidation would occur on July 1, 2025.

If the pools do consolidate, what happens to AMLJIA and APEI?

At the point consolidation is effective, state law says that the two pools would no longer exist as separate entities. APRA would take over the outstanding claims and claim reserves of both pools, as well as the new claims occurring on or after July 1, 2025.

How is the Consolidation Committee approaching decisions

about bringing together APEI and AMLJIA?

Early on in the process, the Committee adopted a set of principles to guide their decision-making:

  • The new pool will be member-oriented: governed by and focused on the needs of its member entities.

  • The new pool will be structured to manage members’ cost of risk, maintain adequate reserves, and strive to provide price stability over time.

  • Transparency will remain an important part of the new pool’s policies, finances, and interactions with members.

  • Through its design of coverage, services, and operations, the new pool will offer broader value to its members than either AMLJIA or APEI could provide alone.

  • A focus of the new pool will be targeted risk management, helping members identify risks and prevent losses both large and small.

  • The Consolidation Committee will carefully weigh the impact on members and work toward equitable outcomes in its decision-making.

Does combining AMLJIA and APEI make sense financially?

It does. A larger pool is likely to have more financial stability than two smaller pools. And there is some opportunity to eliminate duplication: for example, only one auditor is needed instead of two, and only one actuary.

One of the earliest decisions the Consolidation Committee made was to engage a national firm, Select Actuarial, to evaluate the financial condition of each pool and to project the needs of a combined pool. Their conclusion was that as of June 30, 2023, both pools had reserves sufficient to pay for the claims already on the books and enough member equity (surplus) to support a new undertaking.

Another review will take place after June 30, 2024 to ensure that conclusion remains a sound one, and to determine how much of their equity APEI and AMLJIA will each have to contribute to APRA to ensure it has a strong financial foundation at the outset.

Will the existing APEI/AMLJIA staff remain with APRA?

We certainly hope so. The staffs of AMLJIA and APEI have demonstrated their commitment to serving their members over many years, and each individual has an important role to play in making APRA a success. The Committee has decided to maintain offices in both Anchorage and Juneau to avoid displacing any of the current staff members.

The name of the pool may change, but the dedication of the staff will not.

Can I keep my broker?

Will I be required to get a broker if I don’t have one?

Members can indeed keep their broker, and we encourage members to have one. We think brokers can play an important role in ensuring members have the coverage that meets their needs, and that the pool knows about all of the risks members intend to cover.

However, APRA will not require members to have a broker; members will have the option to purchase their coverage directly from APRA, without using a broker. There will be a reasonable adjustment applied to the contribution of each member, reflecting the choice they have made, but the approach and amounts have not yet been determined.

Will I have to pay more in premiums for coverage through APRA

than through my current pool?

It’s difficult to say, because many factors go into calculating premiums. Among the factors are the number of employees a member has, the number and value of the buildings it covers, whether or not it has a police department, and the number and cost of claims it has. As those and other factors change, so do the premiums.

There’s also the cost of additional insurance – “reinsurance” or “excess insurance” - that the pools buy from the commercial market to cover catastrophic property, liability, and workers’ compensation claims. That insurance can be difficult to obtain, and the price generally goes up every year.

What we do know, though, is that the larger the pool, the more stable the prices should be. Bringing together AMLJIA and APEI’s members will mean that the covered entities are spread throughout the state, and a bad claim year for a few members won’t have the same negative effect on a larger pool as it would on a smaller one.

The reinsurance brokers advising the Consolidation Committee have the same perspective: when it comes to consolidation and cost, “1 + 1 should be less than 2.”

Isn’t it a given that eliminating competition between APEI and AMLJIA

will automatically raise prices?

No, it is not. The common wisdom is that when businesses compete, it’s better for consumers. But AMLJIA and APEI aren’t traditional businesses. It’s important to remember that AMLJIA and APEI (and, in the future, APRA) are simply the administrators for a group of public entities that have elected to self-insure one another.Our role is to responsibly manage the pools’ funds and to provide members with loss control services, not to make a profit.

And so while APEI and AMLJIA have historically “competed” with each other to a certain degree, it is not clear that this competition has resulted in overall lower rates for the members of one pool or the other. APEI has had lower prices in some years, while AMLJIA has had them in others.

If we look at the past 10 years, the overall rate change compounded year over year is essentially identical for APEI and AMLJIA. (Click to continue...)

Isn’t it a given that eliminating competition between APEI and AMLJIA

will automatically raise prices? (continued)

As shown in the chart to the right, APEI’s compounded annual change averages 3.73 percent, and AMLJIA’s averages 3.64 percent: nine one-hundredths of one percent difference.

Even if there is no longer the option of two risk pools, it doesn’t mean competition goes away. The private insurance market will still be alive and well in Alaska, and may prove to be the best option for some current members. We think that APRA will offer the best combination of coverage, service, and price for Alaska public entities, but each entity will need to decide for itself.

Will all current pool members automatically become members of

APRA, if and when consolidation occurs?

Current members of AMLJIA and APEI will be welcomed into APRA after executing a new Cooperative Participation Agreement. Of course, as it is now, continued membership will be subject to compliance with the agreement and provisions of the pool bylaws.

What is APRA’s mission?

The Alaska Public Risk Alliance (APRA) empowers member communities by pooling resources and expertise to meet their unique risk management and coverage needs, ensuring long-term sustainability and value.

What does that mean for members? It means that APRA will emphasize collaboration among its members, leveraging their combined strength. APRA will recognize that every member community is unique, with specific needs, and will focus on helping each member address their current and potential risks. In doing so, APRA will aim to provide long-term benefits for its members.