underwriting overview jill dominguez vice president underwriting
DESCRIPTION
UNDERWRITING OVERVIEW JILL DOMINGUEZ VICE PRESIDENT UNDERWRITING. EIM’S CONCERNS 2003 and 2004. All policies will be coming off multi-year programs priced in 1999 or 2000 when premiums were low and limits were high. - PowerPoint PPT PresentationTRANSCRIPT
UNDERWRITING UNDERWRITING
OVERVIEWOVERVIEW
JILL DOMINGUEZJILL DOMINGUEZVICE PRESIDENTVICE PRESIDENTUNDERWRITINGUNDERWRITING
EIM’S CONCERNS2003 and 2004
All policies will be coming off multi-year programs priced in 1999 or 2000 when premiums were low and limits were high.
Need to manage book to ensure we can continue to provide same products and services.
EIM MANDATE:ADJUST PREMIUMS AND MANAGE LIMITS
Member’s Wishes
Keep a large amount of capacity Keep broadest form available Do not hit all Members with the same
increase in premium- differentiate among the Members
2003 IN REVIEW2003 IN REVIEW
4 New Members Joined EIM 169 Members as of 12/31/03 Gross Premium Earned $179,009,816
General Liability $ 71,529,808D & O $ 64,283,611Property $ 43,196,397
2003 COMPARED TO 2002
2003 2002
Gross Premium Earned $179,009,816 $120,707,000
General Liability $ 71,529,808 $ 54,972,000
D&O $ 64,283,611 $ 24,928,000
Property $ 43,196,397 $ 40,807,000
D&O Average Increase: 300%Range: 4% - 4,000%
GL Average Increase: 53%Range: 5% - 370%
*Not Every Member Given Same Increase
Chesapeake Energy Corp.
International Transmission Company
JEA and FPL Group d/b/a/ St. John’s River Power Park
NRG Energy, Inc.
NEW MEMBERS IN 2003
TOTAL MEMBERSHIP
110
120
130
140
150
160
170
180
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
CHANGES TO 2003 POLICY Brought Discovery Period provision back to one year for
100% of annual premium, in lieu of five years at 100% of annual premium
Separated Fiduciary Liability from Excess GL policy; gave a dedicated $25M limit instead of sharing limit with Excess General Liability
Took automatic reinstatement wording off policies
No major cutbacks in what our policies cover; still full follow form to AEGIS; still the broadest GL, Fiduciary, and D&O coverage available for utilities and Members of the energy services industry
EIM’S PRODUCTS… SUCCESSFUL INMAINTAINING LARGE AMOUNT OF CAPACITY
GENERAL LIABILITY Capacity $100M as of 01/01/04 Availability Depends on Risk
D&O/GENERAL PARTNER Capacity $50M as of 01/01/04 $10M to $50M Available Depending on Risk
EXCESS FIDUCIARY LIABILITY $25M Available Depending on Risk
Property Primary and Excess Quota Share Capacity $15M
UPDATE BYUPDATE BYLINE OF BUSINESSLINE OF BUSINESS
EXCESSEXCESS
DIRECTORSDIRECTORS
AND OFFICERSAND OFFICERS
LIABILITYLIABILITY
EIM’S GOALS AND MEMBER PRIORITIESWITH RESPECT TO EXCESS D & O
Maintain Capacity Maintain Broad Coverage Underwrite and Price Each Risk on Its
Individual Merits - Do Not Take Broad Brush Approach
Adjust Pricing on All Accounts - Book Under Priced
EVALUATION FACTORSHOW DO WE DIFFERENTIATE RISK?
Private Company Low Risk Public Power Gas, Water, E&P Electric, Electric/Gas Nuclear Merchant, Energy Trading High
Risk
SUBMISSIONS ANDADDITIONAL INFORMATION
Applications Financial InformationCorporate GovernanceLoss Information/Litigation ProfileCopies of Underlying Terms and ConditionsChanges Not Reflected in Published Financial
Material/News ReleasesAdditional QuestionsTimely Presentation of Coverage Issues
CORPORATE GOVERNANCE
Board Composition (Independence of Board)
CGQ Score (ISS)
Meetings and Attendance
Evaluation of CommitteesAudit CompensationNominating
Rules Regarding Insider Trading
FINANCIAL INFORMATION
Public or PrivateOverall Financial HealthRatings Agency Actions and EvaluationsComparison to Like CompaniesLiquidity, Debt SituationBusiness Strategy Restatements
LITIGATION
Claims Reported to EIM and Their Status
Litigation Disclosed in 10Ks and 10Qs
Any New Litigation
EXCESSEXCESS
FIDUCIARYFIDUCIARY
LIABILITYLIABILITY
EXCESS FIDUCIARY LIABILITY- Maximum Limit of Liability Offered to
Members: $25M Member Must Have at Least $35M in
Underlying Limits
31 Members purchase Excess Fiduciary
SUBMISSION REQUIREMENTS
Underlying carrier application and attachments
5500 or annual plan report for Defined Benefit and Defined Contribution plans (not health and welfare)
Company 10K or Annual Report (if not already supplied)
EXCESS FIDUCIARY LIABILITY
Plan Assets Number of Participants Benefit Plan Types Defined Benefit (Pension Plans) Defined Contribution (401k Type Plans) Health and Welfare Plans
EXCESS FIDUCIARY LIABILITYALL PLANS
Plan Asset SizeDiversification of AssetsQuality of Plan Assets (Blue Chip Companies, High Tech,etc.)Percentage of Company Stock in PlanAsset Type (Stocks, Bonds, Real Estate, Party in Interest Transactions)
DEFINED BENEFITOver Funded or Under Funded Meeting Contribution Requirements
DEFINED CONTRIBUTIONCompany Match – Stock or Cash?Restriction(s) on Trading on AccountsNumber of Investment Options AvailableAbility of Participants to Buy/Sell Asset Classes
PROPERTYPROPERTY
PROPERTY
CURRENTLY INVOLVED WITH 75 TOTAL PROGRAMS
EIM $ 1,612,000
EIM and NEIL $24,531,000
NEIL Fronts $ 7,124,000
PROPERTY
PARTICIPATION INMEMBERS’ PROGRAMS
12/31/2001 1712/31/2002 2512/31/2003 40
PROPERTY
OPEN CLAIMS ACTIVITY2001 12002 62003 11
PROPERTY
Please consider advising your broker to send EIM your property submission.
If a large portion of your property risk is with a direct writer or one carrier, we ask that you consider EIM’s involvement.
EIM SUBMISSION PROCEDURE Submission at Least 45–60 Days Lead Time Detailed Loss Prevention Inspection Reports A Minimum of Five Years Loss Experience A Listing (Preferably Electronic) of Locations and Values
Including Detailed Address Information Business Interruption Worksheets Sample Policy Form Current and Proposed Specs and Limits
COVERAGE CAN BE CONSIDERED ON A PRIMARY BASIS IF:
The Account is a Quality-Engineered and Maintained Risk
Deductibles Meet Minimum Guidelines for Equipment at Risk and Coverage Requested
Rates Contemplate the Exposures Presented by the Risk, Claims Experience, and Form
UNDERWRITING LIMITS Capacity Provided on a Quota Share Basis Only
Maximum Capacity is $15M
Earthquake, Flood, and Wind Exposures Will Be Monitored
Accounts with Zone A Flood and/or Catastrophe Exposures May Be Subject to Reduced Capacity and/or Limits and/or Higher Deductibles
Earthquake and Flood Must Be Written with Annual Aggregates
EXCESSEXCESS
GENERALGENERAL
LIABILITYLIABILITY
EXCESS GENERAL LIABILITY
Excess form can also include: Excess EPLI Excess Workers Comp Excess Professional Liability
($65M max sublimit)
EXCESS GENERAL LIABILITY
Exposure Changes - Operations Safety and Maintenance Dam Inspection Reports AEGIS Risk Assessment Reports if
Available Tariffs – information on liability for FTS DOT 7100 Reports for Pipelines Loss Information
EIM TERRORISM POSITION
CASUALTY PROPERTY
•TRIA-Certified is offered. •TRIA-Certified is offered.
•Do not exclude non- certified, but cap GL to $25M per Member/$125M EIM-wide.
•Non-certified is offered only for U.S. and Puerto Rico.
HOW ARE WE DOING?2003 RISK MANAGERS SURVEY
EIM follows reasonable, prudent and sound underwriting practices:
97% Agree/Strongly Agree
HOW ARE WE DOING?2003 RISK MANAGERS SURVEY
EIM provides added value in form of broad coverage, price stability, consistent limits, and financial strength:
Overall, EIM meets my expectations in breadth of coverage and level of service:
90% Agree/Strongly Agree
96% Agree/Strongly Agree