League of American Bicyclists 2014 Insurance Program Planning Discussion Marla Peters, Sr. Vice President Rene Waterson, Vice President American Specialty Insurance & Risk Services December 9, 2013
Goals for Call Provide Insurance Program Overview Program Summary and 2013 Results Factors affecting Plans Receive input from call participants
Program Summary and 2013 Results General Liability (GL) and Participant Accident (PA) automatically included 594 organizations purchased coverage 81% bicycle clubs; 19% advocacy organizations New Structure Implemented in 2013: Advocacy Organizations (i.e., those with little or no regular ride activity) Flat premiums apply (GL only for those with no regular rides) Special events (i.e., rides with participation fees) can be covered for additional premium Bicycle Clubs Premium based on per member rates (subject to minimum premium) plus applicable special event premium Special Events (i.e., rides with participation fees) Must be scheduled and per participant rates apply (subject to minimum premium per event)
Program Summary and 2013 Results Cont’d Optional Coverages # that Purchased Directors and Officers Liability 140 Bike Refurbishment 29 Nonowned/Hired Auto Liability 15 Excess Liability Limits 11 Optional Participant Accident 3 LCI’s receive General Liability coverage for their individual education activities
Historic Rate Summary (based on bicycle club member rates) YearRateChangeMin. PremiumChange %849.1% %918.3% %932.2% Flat93Flat % % Flat83Flat Flat83Flat %83Flat %886.0% % % 2014 (proposed) %1294.9%
Historic Claims Summary Roughly 7 General Liability claims per insurance year (small number of claims with potential to be very large) 2 claims (1 paid, 1 pending) of roughly $400k from pedestrians struck during club events in past 7 years Growing number of Participant Accident claims that are costing more on average over time 113 claims in 2012 up from 46 in 2008 Average cost of $1,650 in 2008 up to $2,250 in 2012 Average loss per club has more than doubled in this timeframe 2013 losses are anticipated to be greater in number and cost We have had no paid Directors and Officers or Employment Practices claims
Factors Affecting 2014 Large General Liability losses as well as continued increasing Participant Accident losses require an increase in rates and minimum premiums again this year, but a much smaller increase than 2013 Tightening General Liability insurance market conditions for amateur sports associations remain a factor impacting premium increases
2014 Plans Continue current program structure and limits/benefits. Proposed rates are as follows: Current GL/PAProposed GL/PAChange Advocacy Organization – No rides 68 (GL only)75 (GL only)10.3% Advocacy Organization – Minimal rides % Bicycle Club (per member) First 1,000 members % Second 1,000 members % Over 2,000 members % Minimum Premium per Club % Special Event (per participant) First 1,000 participants % Second 1,000 participants % Each participant over 2, % Minimum premium per event %
2014 Proposed Rates Cont’d Current GL/PAProposed GL/PAChange Education (optional benefit) Classroom only – all LCI taught 30 (GL only)33 (GL only)10.0% Classroom only – not all LCI taught 40 (GL only)44 (GL only)10.0% On-bike – all LCI taught % On-bike – not all LCI taught % Bike Refurbishment (optional, if applicable) 60 (GL only)66 (GL only)10.0% Year-Round Office Space 50 (GL only)55 (GL only)10.0%
Discussion Items Program Structure Thoughts on increasing minimum premiums in the future to off-set rates? Does the current coverage and pricing structure accommodate the needs of bicycle clubs and advocacy organizations?