HomeMy WebLinkAbout94.Item 5 PPP Admin Committee 06-12-19 - Insurance RenewalsPresented by
Dennis Mulqueeney
Senior Vice President
Administration Committee
June 12, 2019
2019-20 Operational
Insurance Renewals
Alliant: The specialty insurance leader
State of the Insurance Market
Commercial Insurance marketplace overall is hard
2016, 2017 and 2018 were poorly performing years for the
industry:
▫2017: Highest year insurable loss year on record
▫2018: 3rd highest insurable loss year on record
▫2016, 2017, 2018 Market Posting a Loss in all three years
Accordingly, shrinking market appetite for risk
Largest carriers, Travelers, AIG, FM Global, Lloyds of
London, Chubb retrenching/re-underwriting everything
Wildfire risk is real pressure point in California, as are
“runaway” jury awards in CA, and concerns over police
brutality, road design and abuse
*2018: Inflation-adjusted estimate, subject to change. 2010s is average of 2010 to 2018.
Sources: Property Claims Service, a Verisk Analytics business; Insurance Information Institute.
40 37
79
104
50
1980s:$5 B
1990s: $15 B 2000s: $25 B 2010s: $35 B
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
18
*
Bi
l
l
i
o
n
s
,
2
0
1
8
$
Average for Decade
Hurricane Andrew WTC
Katrina, Rita, Wilma
2018 –Third worst year for U.S. Insured Catastrophe Losses. Average Insured Loss per Year for 1980-2018 is $19.3 B.
Harvey, Irma, Maria
5
U.S. Inflation-Adjusted Cat Losses
Insurance Marketing Activities
Property & Liability
Insurance programs for OCSD are marketed with a multi-year strategy in mind.
Recognizing a significant hardening of the market, the Property and Liability
programs were heavily marketed in 2018.
Physical site inspections were conducted XL Catlin, Zurich and Travelers as well as
AIG for Property, and 20 separate carriers were approached for Liability. The
renewal quotes received are representative of a full canvassing of available public
entity marketplace. Significant advantages in current program were seen in the area
of Flood and cyber liability coverage.
Excess Workers’ Compensation
OCSD participates in the CSAC-EIA program with a retention that is lower than the
open market. A competitive quotation was received this year in the open market,
however, the quotation carries a significantly higher retention for the van pool
operation, and further lacks the depth and breadth of services offered by the EIA
which are valued by OCSD, so this proposal was rejected.
OCSD Historic Rates
Premium to Values/Payroll by Year
Insurance Renewal Costs
Excess Liability 2018 (Actual)2019 (Proposed)Dollar Change % Change
Limit 40,000,000 40,000,000 -0%
SIR 500k/500k 500k/500k -
Premium 497,763 515,371 17,608 4%
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 2,174,174,381 38,203,881 2%
Deductible 500,000 500,000 -0%
Rate Per $100 0.03215 0.03851 .0064 20%
Premium 686,622 837,230 150,608 21.9%
Earthquake
Values 104,773,728 105,392,597 618,869 1%
Rate Per $100 0.0794 0.0822 0.00 -0.83%
Deductibles 5% $5MM Min 5% $5MM Min -0%
Premium 83,179 86,585 3,406 4.1%
Total Premium 1,486,892 1,657,186 170,294 11.5%
Questions?
THANK YOU!