Claims Procedures Presented by: Charity Makela Associate Chief Claim Counsel

Memory Lane

From the Q SISCO Earnings Report: While we believe that title claims are trending downward, claims payments in the second quarter relating to prior year claims continued at elevated levels. Including the impact of the charges described above, title losses and related claims for the second quarter of 2010 were 9.3 percent of title revenues as compared to 16.4 percent for the second quarter of 2009.

From the Q Earning Report: Losses from title policy claims decreased 18.8 percent for the year 2010 compared to 2009 but increased 10.0 percent in the fourth quarter 2010 compared to the fourth quarter As a percentage of title revenues, title losses were 11.1 percent in the fourth quarter 2010 and 8.8 percent in the fourth quarter 2009.

From the Q Earnings Report: Title losses as a percentage of title revenues were 4.4 percent compared to 5.0 percent in the prior year quarter.

From the A.M. Best Announcement of 5/29/15: Specifically driving the positive operating performance trends in 2014, as in 2013 and 2012, was the continued improvement in Stewart’s loss experience from active agents, as losses incurred from agents cancelled in past years were sizeable. This favorable loss trend can be seen in a declining loss and loss adjustment expense incurred ratio since 2010.

Changes in the Claims Management System

Your Claims Team CC/CRsLocationPhone Victor DavisHouston, TX(713) Mike GrujanacAddison, IL(630) Stephen ButlerAddison, IL(630) Kristen DankertLivonia, MI(734) Kelly RickenbachSeattle, WA(206)

Mysterious World of Claims Processing

Secrets to Help your Customer Expedite their Claim Outline the nature of the issue Provide Contact information for the Insured Attach Relevant Documents

Things Guaranteed to Make Your Customer Mad… Customer calls you to alert you to a claim. You listen intently and try to assure the customer that everything will be okay. Notify Stewart and the Claims Department will take care of this for you…Claim Submitted but denial letter issued. Customer calls you to alert you to an issue. You’re sure you can help them. You spend several weeks or months working at it but then concede that the matter should be turned over to the Claims Department.

What Happens Next ??? Claim Routed to West HUB in Chicago Staff Review, Assign and Open New Claim for the Customer A written acknowledgment letter is sent to the Insured that identifies the claim personnel assigned to the file. Also provides contact info & file number Agent letter is created and sent to YOU notifying you of the claim and asking for your input Investigation is undertaken Insured is notified of the Coverage Determination

What to do if your customer contacts you about their pending claim??? Refer them to the Claims Manager (name and contact info is on your letter) Ask to speak to the CM Assistant Call Tonya Moseley (630)

What is Your Role as the Agent? Provide prompt notice of claims to the claims department. Provide all relevant file information to the claims staff upon notification of the claim. Be available as a resource if needed.

Selection of Counsel

Approved Attorney List highly competent legal counsel who deliver results for our insureds at a competitive price for STG Evolves over time Suggestions/Feedback Welcome Oversight of outside counsel is a key area of focus to add value to our business

Improving our Process to Drive Value… Retained Consulting firm to Assist with the review of our 6 largest claim markets –Determine Weighted Average Billing Rate –Leverage rates by manipulating assignments –Shifting hours to equally qualified firms with best WABR Effective March 1, 2015, STG’s CMS adapted a new set of Outside Counsel Retention Guidelines. Utilization of Budgets Evaluation of Counsel – Score Cards

Scorecard Metrics 1.Subjective evaluation of case assessment accuracy (Scale of 1-4) 2.Subjective evaluation of resolution creativity (Scale of 1-4) 3.Subjective evaluation of communication (Scale of 1-4) 4.Cycle time 5.Average matter hourly rate 6.Average claim total outside counsel + settlement fees 7.Average claim disbursement percentage 8.Ratio of hours by partners to associates 9.Number of timekeepers per matter 10.Lawyer Turnover (percentage new timekeepers) 11.Average days to bill 12.% of invoices with adjustments