How to Prepare a Must Review Reinsurance Submission AGRIP Spring Conference, 2003 Robert Jones – Genesis Underwriting Management Co. Mark Peterson – Towers Perrin Reinsurance Douglass Pfeifer – Berkley Risk Administrator Companies
How to Prepare a Must Review Reinsurance Submission Pre-Market Submission Market Presentation Post Market Presentation and Monitoring
Pre-Market Submission 1. Information Gathering Exposure information Historical premium and loss statistics – segregated by line of coverage Contractual information Current reinsurance contracts and structures Coverage Grants or Memorandums of Coverage Financial Statements Enabling Legislation
Pre-Market Submission 2. Analysis of Needs Determine pool’s risk appetite for all lines of coverage Identify unique member exposures Identify catastrophic exposures Actuarial analysis for pricing and retention purposes
Pre-Market Submission 3. Reinsurance Market Analysis Which reinsurers entertain this type of exposure Which reinsurers entertain this type of coverage Renewal vs. new business relationship Assessment of reinsurers’ ability and willingness to pay claims Pooling peers
Market Presentation 1. Cover Letter Summarizes opportunity and pool’s reinsurance coverage objectives Includes highlights that address pooling and reinsurance issues: Establishes time lines and critical dates (include board meetings and statutory requirements if any) Pool experience Reinsurance experience Pricing trends Coverage characteristics Mold Terrorism
Market Presentation 2. Operational Summary Who provides operational support for: Historical performance and prospective outlook Underwriting Claims Loss Control Claims Actuarial Legal Counsel
Market Presentation 4. Historical performance and prospective outlook Gross Performance Reinsurer Performance Tort Reform Projections Market Environment Growth vs. Static membership
Market Presentation 5. Pricing Information Rating Model Example and how developed By coverage line pricing guidelines: Reinsurance industry Customs and practices -or- Proprietary rating methodology with appropriate rationale
Market Presentation 6. Underwriting Information In force underwriting guidelines Material changes over prior periods and associated results Anticipated future changes
Market Presentation 7. Pool Membership Profile Property profile by type of occupancy Property limits / TIV profile Automobile usage profile Population profile Liability operations profile Large deductible identification In force special acceptances
Market Presentation 8. Coverage Requirements Coverage grants / MOC’s Unique characteristics of coverage Mold and terrorism language Anticipated coverage changes
Market Presentation 9. Transmittal Thoughtfully organized Electronic exposure data Timely relative to established time lines
Post Market Presentation and Monitoring 1. Confirmation and follow-up contact 2. Reinforcement of time frame requirements 3. Early indications and impressions 4. Adjustments to structure and terms 5. Face-to-face meetings 6. Squeaky wheel theory: ’79 Chevy Chevette vs. ’03 Ferrari
Questions???