Government efficiency chiefs are seeking to overhaul how local authorities procure insurance, it has emerged.

The news follows Monday's appointment of Michael Wade as one six Crown Representatives - business leaders appointed to ensure the government gets value for money from its suppliers.

Mr Wade, who helped restore the fortunes of historic insurance agents Lloyds of London in the 1990s, has been asked by Cabinet Office minister Francis Maude to bolster government efforts to squeeze further savings by renegotiating deals with major public sector providers.

However, because Whitehall departments tend to self-insure, the Financial Times has reported that Mr Wade will cast his gaze over the wider public sector - including local authorities - to determine if they could get better value for money by either pooling their demand or running self-insurance schemes.

Figures produced by the DCLG suggest local authorities spent £643m on insurance in 2011/12, but the Cabinet Office itself has no clear picture on how much is spent on premiums across other parts of the public sector.

For nine decades from 1903 local authority insurance was largely undertaken by the Mutual Municipal Insurance group, until it incurred substantial losses in the early 1990s which reduced its assets below minimum solvency standards.

Subsequently the larger part of its business was bought by the Zurich Insurance Group, which took on numerous assets and many staff and formed Zurich Municipal in 1993.

Zurich Municipal's public sector director, Andrew Jepp told The MJ the firm would be pleased to work with Mr Wade in his role as a newly appointed Crown Representative

‘Insurance is a complex purchase for all large organisations and this is particularly true of the public sector, which is exposed to a wide variety of complex risks based on the breadth of services they provide,' Mr Jepp said.