Exhibit 3 - Recommendation Letter
LOCKTON COMPANIES 214.969.6700
2100 Ross Avenue, Suite 1400, Dallas, TX 75201-6706 lockton.com
5/20/2024
City of Denton
215 E McKinney
Denton, TX 76201
Re: City of Denton 5/25/2024-25 Denton Energy Center Property Renewal Proposal
To Whom it May Concern:
Thank you for the opportunity to assist the City of Denton with the 5/25/2024-25 Denton Energy
Center Property policy renewal.
The insurance market for conventional power generation risks comparative to other subsets of the
power/utility market remains limited and cautious. Insurance carriers, including AEGIS, continue to
focus heavily on the engineering quality of risks. We are seeing property rate insurance increases in
the 5% to 10% range. Ultimately, Lockton was able to secure renewal terms with the incumbent
carrier, AEGIS, at a 2.6% rate increase. Policy terms & conditions remain as expiring with AEGIS.
Lockton marketed the property placement to several markets, including AEGIS (incumbent), AIG,
Munich Re, Starr, Swiss Re and Zurich. Ultimately, only AEGIS was able to quote 100% of the risk,
which is a favorable policy structure. AIG & Munich Re offered terms on a quota-share basis,
whereby they would split the risk with AEGIS, however it was determined that this option was not
advantageous as the premium savings were nominal.
Lockton recommends the City bind its Energy Center Property Insurance with AEGIS for a total
annual deposit premium of $674,125 including TRIA (Terrorism) less an AEGIS membership credit of
$2,742 plus $32,830.63 surplus lines tax and stamping fee for a total premium including taxes of
$704,213.63.
Thank you for the opportunity to work with the City of Denton. Please let us know if you have any
questions regarding this renewal.
Sincerely,
Neil Cohen
Senior Vice President, Practice Leader
Lockton Companies.