2015 Risk Management Annual Report Presented to the Audit and - PowerPoint PPT Presentation

2015 Risk Management Annual Report Presented to the Audit and Insurance Committee of the Board of Trustees Kendra Cooks Comptroller December 18, 2015

Risk Management Department • Manages Comprehensive Risk Financing Program • University and Affiliates • Assets and Activities System-Wide • Manages Self-Insurance Plan • Establishes and Monitors Internal Charge Rates • Accounting and Reporting • Procures Commercial Insurance • Handles Claims and Manages Relationships with Brokers and Third Party Administrators • Oversees Loss Control Programs

Lines of Coverage

Property Program • Commercial Carrier-Factory Mutual (FM) Global Per Annual Deductible Per Coverage and Policy Limits Occurrence Aggregate Occurrence Buildings and Contents • Fine Arts • Business Interruption • Builder’s Risk $1 B N/A $250k • • Financial Strength Rating • A+ by A.M. Best

2016 Plan Outlook for Property Coverage • Marketed and placed with American International Group, Inc. (AIG) • Enhanced Coverage • Reduced Commercial Premium Costs a Minimum of $2.1 M over Three Years

Liability Program • Commercial Carrier-United Educators Per Annual Deductible Per Coverage and Policy Limits Occurrence Aggregate Occurrence General • Auto $40M $40M $2M • Educator’s Legal • Employment Practices • Professional • Director’s & Officers $25M $25M $2M • • Financial Strength Rating • A by A.M. Best

Fidelity Program • Commercial Carrier-Fidelity and Deposit Company of Maryland (Zurich) Per Annual Deductible Per Coverage and Policy Limits Occurrence Aggregate Occurrence Commercial Crime • Employee Faithful Performance $11M N/A $25K • • Financial Strength Rating • A by A.M. Best

Aviation Program • Commercial Carrier-QBE Insurance Group Limited Coverage and Policy Limits Per Occurrence Annual Aggregate Deductible Airport Operations • Aircraft Liability-Turbine $50M N/A N/A • Aircraft Liability-Piston $25M N/A N/A • Physical Damage N/A N/A $250K • • Financial Strength Rating • A by A.M. Best

2016 Plan Outlook for Aviation Program • Premium Savings of 11% • Lower Deductibles • Coverage Enhancements

Financial Performance

Risk Management Statement of Revenues, Expenses, and Changes in Net Position For the Years Ended September 30 2015 2014 2013 Revenue Internal Charges $ 5,630,438 $ 5,506,573 $ 6,520,659 External Charges/Recovery 1,735,990 123,417 808,704 Investment Income 297,526 275,551 367,877 Other 6,032 300,000 - Total Revenue 7,669,986 6,205,541 7,697,240 Expenses Premium Expenses 3,978,593 4,161,787 4,248,905 Loss Related Expenses 3,635,468 3,406,366 3,368,451 Other Expenses 597,427 799,212 1,501,397 Total Expenses 8,211,488 8,367,365 9,118,753 Change in Net Position $ (541,502) $ (2,161,824) $ (1,421,513) Net Position as of September 30 $ 11,297,733 $ 11,839,234 $ 14,001,059 Outstanding Claims (2,671,844) (2,315,449) (1,926,909) Claims Incurred But Not Reported (5,510,011) (2,475,712) (2,353,605) Unobligated Net Position $ 3,115,878 $ 7,048,073 $ 9,720,545

2016 Plan Outlook • Liability and Auto Programs • Realign Internal Charge Rates Back to Break Even • Continue to Monitor Premium and Loss Related Costs • Conduct Actuarial Review • Reserve Balances • Estimates for Losses Incurred But Not Reported (INBR)

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