Page 1 Recording of this session via any media type is strictly prohibited. Page 1 Risk Management 102: What You Cannot Find in a Textbook

Page 2 Recording of this session via any media type is strictly prohibited. Andreea S. Brezeanu Senior Consultant, EY

Page 3 Recording of this session via any media type is strictly prohibited. 1. Construction related insurance  A contractor or subcontractor could individually purchase insurance or purchase a Controlled Insurance Program (CIP)  Generally, CIPs are designed for large construction projects with construction costs greater than $50m  There are two type of CIPs that can be purchased:  OCIP – Owner Controlled Insurance Program  CCIP – Contractor Controlled Insurance Program  Coverage provided under CIPs include CGL, WC and umbrella liability  Recommended to conduct a cost/benefit analysis  Advantages of CIPs  Peace of mind that all contractors and subcontractors have adequate policy limits  Centralized risk management through a single insurance program  Potential for profitability based on claims experience  Disadvantages of CIPs  Administrative burden  Long-tail claims exposure  Market risk if the insurance market hardens

Page 4 Recording of this session via any media type is strictly prohibited. 2. Coordination of benefits  Practice to ensure that insurance claims are not paid multiple times when someone is insured under multiple insurance policies  One insurer is designated as the primary insurer, which means that claims are sent to that insurance company first  Traditionally, there is lost opportunity for recovery  This is a common practice in health insurance but it also applies to property and casualty insurance  EXAMPLE - Employee is involved in a car accident

Page 5 Recording of this session via any media type is strictly prohibited. 3. Difference in Conditions (DIC) / Difference in Limits (DIL)  A DIC/DIL policy is designed to broaden coverage by providing additional limits of coverage for specific perils  Also an insurance policy to fill in the coverage gaps so there is uniform coverage regardless of location (i.e. local policies)  Most commonly found in global property portfolios or management liability policies

Page 6 Recording of this session via any media type is strictly prohibited. 4. Benchmarking  Benchmarking is a way for a company to compare itself against its peers  There are various resources to assist in the benchmarking exercise  How benchmarking works  Determine industry/type of operations, revenue and employee size  Review limits, retentions and premium based on line of coverage  Benchmarking should be used as an indicator not as a final say

Page 7 Recording of this session via any media type is strictly prohibited. 5. Predictive Modeling  Companies are now utilizing data and creating predictive models for underwriting and claims purposes  In the case of Underwriting Predictive Modeling, models can be used to determine policy pricing  EXAMPLE – Telematics Auto Insurance  In the case of Claims Predictive Modeling, models can be used to assign and process claims  EXAMPLE – Slip and fall FNOL

Page 8 Recording of this session via any media type is strictly prohibited. 6. Legacy systems and new technology implementation  There is no denying technology plays an important role in our day-to-day lives and can be frustrating if not working properly  Companies realize they need to continuously improve how they interact with employees on the back-end and customers on the front-end  As you continue in the insurance industry, you will encounter a technology change and may even be involved in the process  Providing input to how technology should look or what functions is should have is an exciting opportunity  EXAMPLE – Claims software upgrade

Page 9 Recording of this session via any media type is strictly prohibited. Summary 1.Construction related insurance 2.Coordination of benefits 3.Difference in Conditions (DIC) / Difference in Limits (DIL) 4.Benchmarking 5.Predictive Modeling 6.Legacy systems and new technology implementation

Page 10 Recording of this session via any media type is strictly prohibited. Questions? For additional information, please contact: Andreea S. Brezeanu