2016 ACM JIF Annual Planning Retreat

Transcription

1 2016 ACM JIF Annual Planning Retreat Conner Strong & Buckelew / PERMA Insurance Discussion October 26, 2016

2 Introduction

3 Program Updates

4 Cyber Program Update 2016 Renewal Insurance Program Insurance Company: Limits of Insurance: Option 1: Option 2: XL Catlin (Indian Harbor Insurance Company) $6MM Aggregate, $3MM 3 rd Party, $1MM 1 st Party $6MM Aggregate, $3MM 3 rd Party, $3MM 1 st Party Retention (per claim): $10, Pre-Renewal Discussion Widespread Marketing Effort Loss Control Services Limit Benchmarking Analysis 4

5 Cyber Program Update (cont d) Why Increased Limits? Average cost per compromised record (public sector) = $80* Population in TRICO = +300k (members have <1k to >60k) $80 x 1,000 records = $80,000 $80 x 60,000 records = $4,800,000 Single system size with shared services? Human Error Glitch Malicious Attack *2016 IBM Ponemon study 5

6 Cyber Program Update (cont d) 2015 Risk Control Achievements Marc Pfeiffer (Rutgers University) Leadership Summary Pamphlet Executive Summary Best Practices & Resource Guides 2016 Risk Control Goals Member employee Cyber Hygiene program Intrusion testing Technological proficiency Elected officials and administrators education program Model policy template Technology risk support AJG cyber security effort (Pivot Point) Rutgers (Pfeiffer) Educational Seminars 6

7 POL / EPL Program Update 2017 EPL Program Update Change in Adoption (10/1/16) MEL Bulletin MEL Memorandum Deductible / Copay Implication 7

8 POL / EPL Program Update (cont d) Required Elements Changes to Personnel Policy Risk Control Checklist Online Elected Officials Training Training Sessions 8

9 POL / EPL Program Update (cont d) Training Sessions Elected Officials Manager and Supervisor Sessions Police Chief / Command Staff All Other Personnel 9

10 Recent Bulletin Review

11 Drones Bulletin MEL 16-30: Drones (Unmanned Aerial Vehicles) Covered Non-Owned Leased for less than 1 year Approved use by Named Insured Not Covered Owned Leased for 1 year or more Unapproved use by Named Insured Considerations FAA requirements Safety plan Personal insurance Personal injury What to Expect Genesis FAA guidelines MEL program 11

12 Vacant Buildings Bulletin MEL 16-10: Vacant, Rehabilitations, Builders Risk, Newly Acquired Reporting Requirements Changes Notification window reduced from 60 days to 30 days New reporting requirements 12

13 Vacant Buildings Current Valuation Loss Payment Options: 1. Value 2. Cost to repair/replace 3. Agreed value 4. Like kind and quality Valuation Options: Replacement Cost: 1. Repair 2. Rebuild/replace with equivalent kind/quality 3. Necessary cost to repair/rebuild 4. Scheduled limits 5. ACV if useless/obsolete Proposed Valuation? 1. Actual cash value 2. Replacement cost upon review and approval of insurer Proposed Coverage? 1. Named Perils only Fire, lightning, explosion, smoke, windstorm, hail, riot, civil commotion, aircraft, vehicles, vandalism, sprinkler leakage, sinkhole collapse, volcanic action, watercraft and malicious intent 13

14 2017 Insurance Renewal

15 Program Structure Statutory Statutory Limit $125,000,000 $125,000,000 $125,000,000 $75,000,000 Excess Flood & Earth Movement Quota Share $25,000,000 $20,000,000 Equipment Breakdown $15,000,000 Zurich American $10,000,000 $8,000,000 $10,000,000 Munich Re Reinsurance of MEL Optional Layers of $8,000,000 General Re Optional Program has various sub-limits including $7,000,000 10x10 5x10 Reinsurance of MEL Optional layers of but not limited too: $6,000,000 3x7 2x5 1x2 2x2 $50,000,000 Peril of Flood $5,000,000 $3,250,000 $5,000,000 3x2 General Re Safety National 4x2 $50,000,000 $3,000,000 Standard 4x6 Earth Movement $2,000,000 Limits per member entity $2,000,000 Flood locations in SFHA $1,700,000 $1,750,000 $1,450,000 per member entity $500,000 buliding deductible MEL Retention $1,000,000 MEL Retention $500,000 contents deductible $500,000 $300,000 $300,000 QBE North America $450,000 MEL Retention $50,000 JIF Retention $10,000 $300,000 $100,000 JIF Retention $45,000 MEL RETENTION $5,000 JIF Retention $ / % Various $1,000 $5,000 $2,000 Member Deductible / Copay Member Deductible Member Deductible Excess Liability Workers Comp. Empolyers Liability Public Offcials Employment Practices Property Equipment Breakdown 15

16 Program Structure (cont d) Statutory $125,000,000 $75,000,000 $20,000,000 $15,000,000 $10,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $3,000,000 $2,000,000 $1,750,000 $1,000,000 $500,000 $300,000 $50,000 $10,000 $5,000 $2,000 $6,000,000 JIF Annual Aggregate ` $5,000,000 Each Occurrence $3,000,000 per claim $2,000,000 Member Annual Aggregate $950,000 $1,000,000 MEL MEL Optional Limits of Retention Retention XL Catlin XL Catlin $2MM $50,000 JIF Retention $1MM $ Various $ Various Member Deductible Crime (Blanket) Member Deductible Crime (Statutory) $10,000 Member Deductible $ Various Member Deductible Cyber Non-Owned Volunteer Liability Aircraft Liability D&O 16

17 Catastrophe Modeling AIR Worldwide Ground Up AAL SD ,000 5,000 10,000 Aggregate 4,712,628 25,733,608 11,576,614 44,193,775 83,237, ,337, ,452, ,083, ,616,232 1,035,681,025 Occurrence 4,002,227 25,397,842 9,909,481 41,712,720 77,957, ,473, ,786, ,676, ,772,261 1,035,222,869 Top 10 Drivers of Loss Street North Street 3700 New Jersey Ave 714 Beach Avenue 1417 W Brigantine Avenue 4400 New Jersey Avenue 220 ADAMS STREET 401 W Youngs Avenue 455 9TH STREET 18 SEA VIEW COURT Calvert Avenue City State PostalCode AAL Ocean City NJ ,159 WILDWOOD NJ ,471 Cape May NJ ,015 Brigantine NJ ,567 Wildwood NJ ,604 HOBOKEN NJ ,399 Wildwood NJ ,424 HOBOKEN NJ ,742 BAYONNE NJ ,221 Ventnor NJ ,168 17

18 Property Claim Summary By Layer Year Total 2005 $ 65,582 $ 65, $ 18,907 $ 18, $ 1,057,501 $ 579,250 $ 500,000 $ 1,776,741 $ 1,269,499 $ 5,182, $ 671,953 $ 316,866 $ 62,762 $ 1,051, $ 674,725 $ 389,442 $ 250,000 $ 884,410 $ 2,198, $ 1,138,217 $ 750,000 $ 623,751 $ 2,000,000 $ 3,686,734 $ 7,352,424 $ 15,551, $ 1,619,560 $ 1,036,819 $ 620,831 $ 2,000,000 $ 6,000,000 $ 59,714,438 $ 70,991, $ 790,972 $ 500,000 $ 500,000 $ 305,637 $ 2,096, $ 1,613,397 $ 463,271 $ 250,000 $ 100,941 $ 2,427, $ 1,853,565 $ 1,500,000 $ 1,181,495 $ 862,784 $ 5,397, $ 1,250,000 $ 868,154 $ 250,000 $ 840,103 $ 3,208,257 Total $ 10,754,379 $ 6,403,802 $ 4,238,839 $ 8,770,616 $ 10,956,233 $ 67,066,862 $ 108,190,731 18

19 Property Claim Summary Hurricane Sandy Loss Type Paid Loss Expenses Incurred Wind $12,508,124 $310,806 $12,818,931 Flood $50,000,000 $6,348,008 $56,358,713 Limits All Risk: $125,000,000 Flood (annual aggregate): $50,000,000 SFHA 100 year (per location): $2,500,000 Deductibles Policy (PD & TE): $250,000 SFHA 100, Municipal Buildings: Building (each building): $500,000 Contents (each building): $500,000 SFHA 100, Housing Authorities: Building (each building): $250,000 Contents (each building): $100,000 19

20 Property Insurance Named Storm Deductible Locations east of the Garden State Parkway in Atlantic, Ocean, Monmouth and Burlington counties and all locations in Cape May County: PD (per occurrence) 1% TIV TE (per occurrence) 1% 12 months gross earnings Minimum (PD & TE, per location) $500,000 Maximum (PD & TE, per occ.) $1,000,000 ~4k locations and ~$2BB TIV East of the Garden State Parkway and all of Cape May County 20

21 Property Insurance Named Storm Resolution Resolution approved to participate in Named Storm Deductible Sharing Program. Eight (8) MEL member JIFS participating in the program. MEL acts as lead agency to administer the agreement. Participating JIFs contribute to total amount of deductible pro rata based each JIFs reported values for all properties subject to the NS deductible. The 1 st $5,000 of loss at each location is not subject to the sharing provision. Only insured property at insured locations are subject to the sharing program. Perils Wind and/or Flood To be eligible for reimbursement: Member must file a claim with FEMA and NFIP policies Reimbursement under this agreement shall be reduced by such reimbursement 21

22 Property Insurance Named Storm Scenarios JIFs with property exposure east of the GSP: Atlantic Burlington Central First responders Mid Jersey Monmouth NJ Public Housing Ocean 22

23 Property Insurance Named Storm Scenarios Total Insurable Value East of the GSP - $2 Billion Each JIF s share of the Total Insurable Value: Atlantic 33.72% Burlington 0.15% Central 4.28% First Responders 0.51% Mid Jersey 3.30% Monmouth 25.07% NJ Public Housing 8.26% Ocean 24.72% % 23

24 Shared Deductible Program 1% of total values of damaged properties subject to a $500,000 minimum deductible and a $1,000,000 maximum deductible for all locations. Affected JIFs enter interlocal agreement to share deductibles in proportion to their total reported insurable property values. ACM JIF s share is 33.72% Monmouth JIF = 25.07% Ocean JIF = 24.72% Applies East of Parkway Applies to all of Cape May County 24

25 How the Program Works (continued) 1% of total values of damaged properties subject to a $500,000 minimum deductible and a $1,000,000 maximum deductible for all locations. Affected JIFs enter interlocal agreement to share deductibles in proportion to their total reported insurable property values. ACM JIF s share is 33.72% Monmouth JIF = 25.07% Ocean JIF = 24.72% Example: 7 affected members in the ACMJIF suffer extensive damage from a Named Storm totaling $8,000,000 (7,000,000 PD & $1,000,000 TE). 6 Members of Ocean JIF suffer totaling $6,565,000 ($3,365,000 PD and $3,200,000 TE) from the same storm. The total insurable value of the damaged locations is $294,685,000. ($150,000,000 ACM and $144,000,000 Ocean) 1% of $294,685,000 = $2,946,850. Maximum deductible of $1,000,000 applies $1,000,000 to be allocated to the affected JIFs in proportion to their affected property values. ACM share = 33.72% = $337,190 (versus $1,500,000) 25

26 How the Program Works (continued) 1% of total values of damaged properties subject to a $500,000 minimum deductible and a $1,000,000 maximum deductible for all locations. Affected JIFs enter interlocal agreement to share deductibles in proportion to their total reported insurable property values. ACM JIF s share is 33.72% Monmouth JIF = 25.07% Ocean JIF = 24.72% Example: 8 affected members in the ACMJIF suffer extensive damage from a Named Storm totaling $4,000,000 (3,000,000 PD & $1,000,000 TE). 4 Members of Monmouth JIF suffer totaling $2, ($1,000,000 PD and $1,000,000 TE) from the same storm. The total insurable value of the damaged locations is $96,000,000. ($70,000,000 ACM and $26,000,000 Monmouth) 1% of $96,000,000 = $960,000. Below Maximum deductible and Above minimum deductible $960,000 to be allocated to the affected JIFs in proportion to their affected property values. ACM share = 33.72% = $323,702 (versus $700,000). 26

27 How the Program Works (continued) 1% of total values of damaged properties subject to a $500,000 minimum deductible and a $1,000,000 maximum deductible for all locations. Affected JIFs enter interlocal agreement to share deductibles in proportion to their total reported insurable property values. ACM JIF s share is 33.72% Monmouth JIF = 25.07% Ocean JIF = 24.72% ACM share = 33.72% = $168,595 (versus $500,000) Example: 8 affected members in the ACM JIF suffer extensive damage from a Named Storm totaling $1,100,000 ($1,000,000 PD and $100,000 TE). The total insurable value of the damaged locations is $1,800,000 ($1,500,000 PD and $300,000 TE). 1% of $1,800,000 = $18,000. Minimum deductible of $500,000 applies $500,000 to be allocated to the participating JIFs in proportion to their affected property values.. 27

28 Named Storms affecting MEL Member JIFs Named Storms affecting MEL Member JIFs Hurricane Floyd 1999 Hurricane Irene 2011 Hurricane Sandy 2012 Property Policy Highest Deductible Applies Flood surge is part of Flood peril and subject to policy flood aggregate All 3 named storms were primarily flood event Insurer chose the SFHA flood deductible (100 year flood plain) as the highest deductible. Named Storm deductible was not triggered. 28

29 Thank You Joseph Hrubash Vice President, Senior Account Executive / MEL Deputy Executive Director P: (973) jhrubash@permainc.com Public Entity Services David Grubb Managing Director / Senior Vice President PERMA Risk Management Practice Leader MEL Executive Director P: (201) dgrubb@permainc.com Edward J. Cooney, MBA Vice President, Account Executive / Underwriting Manager P: (973) ecooney@connerstrong.com Brokerage Services Cathleen Kiernan Account Executive P: (201) ckiernan@permainc.com Nancy Ghani Account Executive P: (201) nghani@permainc.com Timothy J. Gosnear, CPCU, AU Managing Director Senior Vice President P: (267) tgosnear@connerstrong.com Timothy Friel Senior Account Manager P: (267) tfriel@connerstrong.com Alex Deluccia Account Analyst P: (267) adeluccia@connerstrong.com 9 Campus Drive, Suite 216 Parsippany, NJ Two Liberty Place 50 S. 16 th Street, Suite 3600 Philadelphia, PA George Norcross Executive Chairman P : (856) Mike Tiagwad President & Chief Executive Officer P : (856)