Thursday, September 24, 2015 Des Moines, IA. 1:00 2:00 p.m. EQUINE MORTALITY

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1 Thursday, September 24, 2015 Des Moines, IA 1:00 2:00 p.m. EQUINE MORTALITY Presented by Cameron Rudolph, AFIS Copyright 2015 International Risk Management Institute, Inc. 1

2 Notes This file is set up for duplexed printing. Therefore, there are pages that are intentionally left blank. If you print this file, we suggest that you set your printer to duplex. 2

3 Cameron Rudolph, AFIS Rudy Rudolph brings over 18 years experience in many facets of the insurance industry, including positions of loss control, risk management, producer, sales manager, managing director, and national agricultural managing director with a successful background in entrepreneurial venues. He completed 10 years of service with Wells Fargo Insurance Services/Acordia in December of 2010 when their business model changed to no longer include agricultural business development going forward. Mr. Rudolph s background is very diverse, involving public safety, risk manager for a world operational mining company, loss control manager/marketing for an insurer, and risk consultant with a large broker before joining Wells Fargo. His experience offers a rich mix of product development, concept marketing, relationship building, operations, and strategic management. He is diversely experienced from startup to build-out, creating successes and remedying problems. He has expertise in evaluating and organizing teams, turning them into top-performing producers and sales associates, and is skilled in cultivating and maintaining relationships with clients and markets throughout the industry. Mr. Rudolph earned the Agribusiness and Farm Insurance Specialist (AFIS ) certification in 2006 and is currently an educator affiliated with Agency Management Resource Group. AMRG is a training, education, and consulting firm located in Roseville, California, serving various facets of the insurance and financial services industries. 3

4 Notes This file is set up for duplexed printing. Therefore, there are pages that are intentionally left blank. If you print this file, we suggest that you set your printer to duplex. 4

5 Equine Mortality and Livestock Insurance Presented by Cameron Rudolph US Horse Industry American Horse Council study of 2005 and economic impact of US horse industry The horse industry has a total impact of $102 billion on US gross domestic product (GDP) The horse industry provides 1.4 million jobs The horse industry pays $1.9 billion in taxes each year 2 5

6 US Horse Industry There are 4.7 million Americans involved in the industry as horse owners, service providers, employees, and volunteers 1.9 million are horse owners 702,000 are employees million are volunteers 3 US Horse Industry Economic impact $102 billion $26.1 billion from racing $28.8 billion from showing $32 billion from recreation $14.7 billion from other activities Median income for horse-owning households is $60,000 36% of horse-owning households have income over $75,000 There are 6.9 million horses in the United States million used for showing 4 6

7 US Horse Industry Pari-mutuel racing is legal in 43 states where thoroughbreds, standardbreds, quarter horses, and Arabians race at 175 racetracks 5 Horse Population Characteristics United States has 9.2 million horses: 1.29 million thoroughbreds 3.29 million quarter horses 4.64 million other breeds 6 7

8 California Horse Industry The horse industry has a total impact of $7.0 billion on California GDP The horse industry provides 130,200 (full-time equivalent) jobs There are 698,000 horses in California 7 California Horse Industry 12% are involved in racing 88% are involved in showing, recreation, or other activities California has five racetracks with long seasons, one racetrack with a medium-length season, nine fairgrounds with short seasons 8 8

9 California Horse Industry 39% of California s horse owners have household incomes of $75,000 or more 48% of California s horse owners reside in communities with populations of 50,000 or more 9 Why Do We Need To Know about This Coverage? Protecting our clients Reduced errors and omissions exposure Competition Revenue 10 9

10 Equine Insurance Learning goals Understand and describe key areas of the application Understand and describe key areas of the policy Understand and describe the endorsements available 11 Dressage Thoroughbred Crosses, Warmbloods Ages: 3 14 years Rates: 3.45% of insured value Values: $5,000 $1,000,000 Totilas: 10-year-old stallion $13.6 million (2010) 12 10

11 Hunter/Jumper Three-Day Event Ages: 3 14 years Rates: Hunter/jumper: % Three-day eventers: 4.5 5% Values: $5,000 $1,000, Quarter Horses/Paints/Appaloosa/Pintos Ages: 1 14 years Rates: 3.2% breeding only 3.8% roping/gymkhana Values: $5,000 $500,

12 Arabian/Morgan/Andalusians/Fresians Ages: 151 days 14 years Rates: % of insured value Values: $5,000 $1,000, Western attire Arabian/Morgan/Andalusian 16 12

13 Application Applicant section Animal information (name, date of birth, registration #, use, breed, date acquired, how acquired, purchase price) Coverage selection (full mortality, theft, major medical, surgical, loss of use, named perils, optional perils) General information section 17 Application Amount of insurance exceeds purchase price Insurable interest installment purchases or leases Equine information (page 3) #2) Quarter horse hyperkalemic periodic paralysis? #7) Laminitis/founder #9) Hunter/jumper or racing Page 4 justification of value 18 13

14 Policy Named insured and address Policy period Policy number Schedule (describes item number, name and registration number, breed, age, sex, use, rate, amount of insurance) Key sections of the policy Insuring agreement Covered causes of loss death or authorized humane destruction III. Payment of loss agreed value (two exceptions: claiming race, castration) 19 Exclusions and exceptions A. (1) preexisting condition A. (4) giving of medication IV. Exclusions 20 14

15 Conditions Precedent VI. Conditions precedent: health, territory (United States and Canada), proper use care Insurable interest F. Insured s duties: immediately employ vet, give notice 24- hour claim line, postmortem 2B. Administration of medication (vet or experienced personnel directed by vet) 21 Surgical $10,000 aggregate limit per horse Premium $150 per horse Deductible $250 per claim Coinsurance 30% Endorsements Major medical $10,000 aggregate limit per horse Premium $375 per horse Deductible $250/claim Coinsurance 30% DX testing $1,200 limit for shock wave therapy Major medical $15,000 limit Premium $475 Deductible $250/claim Coinsurance 30% DX testing $1,200 limit for shock wave therapy 22 15

16 Endorsements (cont d) Guaranteed renewal 365 days maximum Loss of use hunter/jumper, dressage, cutting, reining 2.5% of insured value Insurer pays: o or o 70% of agreed value if destroyed or insurer retains ownership interest 50% of agreed value if insured retains ownership and does not destroy Accident, sickness, and disease 0.5% of insured value 23 Surgical Endorsement Coverage reasonable and customary veterinary fees for surgical treatment No age limitation Limits: $5,000 $10,000 Deductible: $250 Coinsurance 30% No racing Must be written in addition to equine mortality policy 24 16

17 Major Medical Endorsements Coverage: reasonable and customary veterinary fees for medical treatment necessitated by accident, injury, or illness Exclusions: key (few is better) Age restrictions: 30 days 20 years Limits: $10,000 $15,000 per year (premium $375 or $475) Deductible: $250 per claim 30% coinsurance for diagnostic testing No racing Must be written in addition to equine mortality policy 25 Guaranteed Renewal Accident, illness, or disease manifesting during policy term Coverage pays if horse dies or has to be euthanized Requires that written notice be given prior to expiration of policy 26 17

18 Loss of Use Extension Coverage permits destruction for economic reasons (typically only written for high-value hunter/jumpers or dressage horses) Policy will pay 70% or 50% of insured value Horse must be destroyed or possession turned over to company for 70% payment Must be written in addition to equine mortality policy 27 Accident, Sickness, and Disease Exam Clinical exam Breeding evaluation Semen evaluation 28 18

19 Accident, Sickness, and Disease During the policy period, it becomes permanently impotent, infertile, or incapable of serving mares. Incapacity must result from an accident, illness, or disease that occurs after the effective date of endorsement. Satisfactory fertility exam certificate must be received before coverage can begin. 29 Examples Claims 30 19

20 Notes This file is set up for duplexed printing. Therefore, there are pages that are intentionally left blank. If you print this file, we suggest that you set your printer to duplex. 20