Developing the Coverage Chart and Determining Financial Exposures Casualty Actuarial Society 2000 Annual Meeting Barbara Murray November 12 - 15, 2000 1

Developing the Direct Coverage Chart Identify your policies. Identify policies issued by others (discovery, the insured, primary carriers, past defense sharing agreements). Identify gaps/overlaps. Identify shared layers. Paint the picture. 2

Developing the Reinsurance Coverage Chart Identify treaties potentially applicable. Identify Facultative Certificates insuring the account. Identify potential retrocessional exposures. Use your claims runs, cedents, brokers, and analysis of your contracts. 3

Determining the Direct Potential Exposures Obtain a Corporate Genealogy. Learn their business (when, where, who and how). Identify losses and potential losses. Quantify losses and potential losses. Analyze loss types to coverage’s afforded. (Combined Single Limits, Aggregates, types of occurrences, etc…). Make assumptions and apply them (trigger, occurrences, etc…). 4

EIL Example, Non-aggregating Identify sites. Determine operational and involvement dates. Evaluate total damages and determine insureds share. Apply assumptions. Apply results to direct coverage chart. Identify which sites hit your policies. 5

Asbestos Example, Aggregating Identify products (when, where and how used). Identify claimants and potential claimants. Determine past settlement values. Project future settlement values. Apply assumptions. Apply results to direct coverage charts. Identify which of your policies get hit. 6

Determining your Reinsurance and Retro Exposures Apply exposure analysis findings to reinsurance and retro coverage chart. Know the attachment point and retention's. Identify existing and potential future claims based upon policies and contracts. Know your gross and net. 7