HomeMy WebLinkAboutExhibit 5 - Recommendation Letter
LOCKTON COMPANIES 214.969.6700
2601 Victory Avenue, Suite 1500, Dallas TX 75219 lockton.com
08/25/2026
City of Denton
215 E McKinney
Denton, TX 76201
Re: City of Denton 10/1/2026-27 Property Insurance Renewal Proposal
To Whom it May Concern,
Thank you for the opportunity to assist the City of Denton with the 10/1/2026-27 Property Insurance Policy Renewal.
The commercial property insurance market is showing signs of stabilization in 2026, though municipalities continue to face
challenges due to severe weather exposures and concentration of values. While average rate increases have moderated,
properties vulnerable to natural disasters such as hail, wind, tornados etc. are still subject to stricter underwriting and higher
deductibles.
In 2026, Lockton approached 3 commercial property insurers. Travelers, Zurich and the incumbent carrier, AFM. All markets
Lockton approached pointed to concerns with aggregation of values, total policy limits, wind/hail deductibles, and pricing.
The non-incumbent markets Lockton approached declined to quote the renewal. Zurich cited the wind/hail exposure as its
largest concern, and because of this could only offer 10M in limit. The city would have to purchase an additional $490M to
match today’s program. Travelers cited a concern with the quantity of electric generation done by the city (DME). For this
reason, they declined to offer a quote. AFM was able to offer competitive terms and pricing for the 10/1/2026-27 term. AFM
has provided renewal terms at an annual premium of $1,043,163 (excluding TRIA). This represents a 5% rate decrease year
over year. AFM was also able to offer $50,000,000 of Aggregate Flood Limit for 1100 South Mayhill, which is an
improvement over the original offer of a $5,000,000 flood limit. For an additional premium of $9,500, Lockton recommends
that the City purchase this additional coverage. The premium associated with this additional coverage is included in the
$1,043,163 premium amount.
Considering the City’s concentration of values, catastrophic exposure and AFM’s competitive renewal pricing, Lockton’s
recommendation is that the City of Denton renew its property insurance with AFM for the 10/1/2026-27 term.
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
Lockton Companies.