Southwark Council has 13,000 leaseholders where it is the freeholder. After a very thorough consultation process with leaseholders Zurich has been the supplier of building insurance for two and a half years. The renewal date is April 2009.

Due to the lengthy consultation process required it’s considered too late to consider a full tendering process so officers are recommending the Zurich contract be extended by one year.

Zurich appear to have very carefully selected the date to consider any increase in charges via the rebuilding prices index produced by the Royal Institute of Charterered Surveyors as October. October was a high at 6.6% per annum which Zurich proposed to round up to 7%. How thoughtful. Whereas December is 5.2% and we can reasonably be sure in the current economic climate will fall further.

http://www.bcis.co.uk/rebuildingcosts/index/rebuildingcosts.htm

For leaseholders of Southwark council properties the difference between 7.0% and 5.2% will be an average of £2.68 for every leaseholder.

Clearly this is wrong and I will endeavour for more rigourous supplier management of Zurich to take place to get these increases minimised.