HomeMy WebLinkAbout96.Item 7 PPP 04-10-19 Admin Committee Meeting - Insurance RenewalsPresented by
Robert Lowe
Vice President
Administration Committee
April 10, 2019
2019-20 Operational
Insurance Renewals
Alliant: The specialty insurance leader
•2018 is likely to be a negative catastrophe year for the second year in a row for
re/insurance industry as overall losses are expected to be above the 10-year average of
$50 billion.
•Weather extremes, wildfires, catastrophic losses and investment earnings remain areas
of concern for insurers.
Key Industry Metrics
•The U.S. property & casualty industry is likely to post a significant loss in revenue for 2018
for a second year in a row.
•2017 was the costliest year in history, in terms of global losses
•In the first-half 2018, policyholders are still paying record amounts in premium, but
carriers are losing more in claims payments than what is being collected.
Highlights
2Source: A.M. Best, ISO, Property Casualty Insurers Association of America (PCI) and Peel Hunt
U.S. Insured Catastrophe Losses
2017 –Worst Ever for U.S. Insured Catastrophe Losses. Average Insured Loss per Year for 1989-2017 is $22.4 B.
Sources: *2017: Inflation-adjusted PCS estimate, subject to change. **2018: Peel Hunt expectation
Sources: Property Claims Service, a Verisk Analytics business; Insurance Information Institute.
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$10
$20
$30
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$60
$70
$80
$90
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89 91 93 95 97 99 01 03 05 07 09 11 13 15 17*
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5 yr. moving average
Hurricane Andrew WTC
Katrina, Rita, Wilma
Harvey, Irma, Maria*
Wildfires
•Carr Fire, Redding, CA July 18,
2018
•Photo courtesy of Cal Fire
4
On average, more than 100,000 wildfires, also called wildland fires or forest
fires, clear 4 million to 5 million acres (1.6 million to 2 million hectares) of land in
the U.S. every year. In recent years, wildfires have burned up to 9 million acres
(3.6 million hectares) of land.
Earthquakes
Rescue workers
look at the Yun Tsui
building, which is
leaning at a
precarious angle, in
the Taiwanese city
of Hualien.
It was hit by a 7.1
magnitude
earthquake on
February 6, 2018 ,
which killed 17
people.
5
(Anthony Wallace / AFP/Getty Images)
Taiwan sits on an earthquake “ring of fire”
that also touches California.
6
The Alaska Earthquake of Nov 30, 2018
•A magnitude (M) 7.0
earthquake struck north of
Anchorage, Alaska, on
November 30, 2018.
•Located along the Ring of Fire which sees 81% of the
world’s largest
earthquakes, Alaska is no
stranger to earthquakes.
Alaska has experienced
several of these
devastating earthquakes in
the past including the M9.2
in 1964 –the largest U.S.
earthquake in recorded
history.
Public Entity Liability
Coverage for damages to third parties.
Includes:
▫General Liability
▫Automobile Liability
▫Public Entity Errors and Omissions
−Professional Liability
−Directors and Officers Liability
−Employment Practices Liability
All coverage provided on an “Occurrence” Basis
Public Entity Liability –Limits
and Retentions
Policy Limits –Per Occurrence/Annual
Aggregate
▫General:$ 40MM/$40MM
▫Automobile:$ 40MM/$40MM
▫E&O/D&O/EPL: $ 40MM/$40MM
Policy Retentions
▫General:$ 500,000
▫Auto:$ 500,000
▫E&O/D&O/EPL: $ 500,000
Expiring Premium: $ 497,763
Excess Workers’ Compensation
Coverage for injuries to employees while in the course and scope of employment
▫Limits Statutory
▫Retention $1,000,000
▫Payroll $69,779,430
▫Expiring Premium $219,328
Property Insurance -Overview
Coverage for damage to real and personal property.
Total Insurable Value:$2,135,970,500
Policy Limit:$1,000,000,000
Key Sublimits
▫Boiler & Machinery:$100,000,000
▫Business Interruption:$100,000,000
▫Flood Zones A&V:$150,000,000
▫Flood All Other Zones:$300,000,000
▫Course of Construction:$50,000,000
▫Terrorism $500,000,000
Expiring Premium $686,622
Deductible:$500,000
Earthquake Overview
Current Coverage
▫Coverage for key buildings located at both Plants 1 and 2
▫Coverage up to $25,000,000
▫Expiring Premium: $83,179
▫Deductible 5%/$5MM Minimum
Historical Rates
-
0.100
0.200
0.300
0.400
0.500
0.600
0.700
02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Property & Boiler
Liability
Excess WC
Renewal Strategy
Excess Liability 2018 (Actual)2019 (Projected)Dollar Change % Change
Limit 40,000,000 40,000,000 -0%
SIR 500k/500k 500k/500k -
Premium 497,763 597,316 99,553 20%
Excess Workers' Comp
Payroll 69,779,430 69,871,030 91,600 0.1%
Limit Statutory Statutory --
Rate Per $100 0.3143 0.3120 (0.002)-0.7%
SIR 1,000,000 1,000,000 -0.0%
Premium 219,328 218,000 -1,328 -0.6%
Property (incl. B&M)
Values 2,135,970,500 2,173,424,381 37,453,881 2%
Deductible 500,000 500,000 -0%
Rate Per $100 0.03215 0.03697 0 15%
Premium 686,622 803,461 116,839 17.0%
Earthquake
Values 104,773,728 106,432,682 1,658,954 2%
Rate Per $100 0.0794 0.0794 0.00 0%
Deductibles 5% $5MM Min 5% $5MM Min -0%
Premium 83,179 84,508 1,329 1.6%
Total Premium 1,486,892 1,703,284 216,392 14.6%
Questions?
THANK YOU!