1. News from your Rating Organizations
Mark Smith, CPCU
El Cid Balitaan

2. News we’ll be discussing
New Products
ISO – Flood & Millennials
AAIS – CannaBOP, Auto, & PPL
Major Program Revisions:
ISO – Management Protection & Personal Auto
Regulatory Challenges
Filings & ‘desk drawer’ rules
Institutional knowledge
Insurtech
Blockchain
Policy Automation

3. New Product: Flood
4.2 million homes ($1.1 trillion exposure) are at risk of hurricane storm surge flooding.
Flood is most common and costly natural disaster
43% of homeowners believe they are covered
Only 12% of homeowners have a flood policy
Flood Insurance Gap represents $40B market

4. New Product: Flood NFIP – Federal Flood Program
$250,000 for structures
$100,000 for contents (purchased separately)
No coverage for basements, crawlspaces, “walkouts”
Limited coverage for mold
No coverage for Additional Living Expense (ALE)
Coverage for Increased Cost of Compliance
Rates are not actuarially sound (i.e. subsidized)

5. New Product: Flood Stand alone single peril policy
Broader, more flexible coverage than NFIP
Higher coverage limits available
Additional coverage options available
Based on court tested ISO HO policy language
Deductibles, valuations, terms all familiar

6. New Product: Flood Modeled actuarially sound loss costs (inland)
Experience based loss costs (hurricanes)
Numerous deductible options
Newly introduced flood territories

7. New Product: CannaBOP Cannabis exposure is here!
64% Approval rating (Gallup Poll, October 2017)
$10 billion in U.S. sales (2017); $20 billion by 2021
25,000+ cannabis businesses
200,000+ employees
End of Prohibition?
Cannabis + BOP = AAIS’s CannaBOP
Answering the call for cannabis coverage in 2018 and the future
Property Coverages – crime, theft, spoilage, fire, etc.
Liability Coverage – products, premises, P&A, etc.
Sorry, no samples

8. New Product: CannaBOP Cannabis + BOP = AAIS’s CannaBOP (18-0042)
Built on existing AAIS California BOP
Form, Manual, & Ratings
Filed 4/20/18!
Currently California only, but plans for expansion
Click for more information on AAIS CannaBOP
Target Insureds
Dispensaries
Small to Medium Sized Storage Facilities
Private Labs
Packaging Facilities
Ancillary Business

9. New Product: Millennials
Gen Y ( )
40% of US population
Life decisions postponed
Highly educated – tech savvy
New modes of transportation
LOVE social media

10. New Product: Millennials
1/3 want to customize coverage

11. New Product: Millennials
55% of renters do not have renters insurance
Why?

12. New Product: Millennials
22% of millennials who don’t own/lease or drive, are interested in named non-owner coverage

13. New Product: Millennials
Strategy for ISO product revisions:
Personal Auto:
Option for limited personal property coverage anywhere
in the world
Personal Auto & Homeowners:
Named Non-owner Physical Damage Coverage
Updated Renters Form (Q4 2018)
Personal Inland Marine
Option for personal property coverage anywhere in the world (Q4 2018)

14. New Product: Auto AAIS Personal Auto Introduced late 2016
Comprehensive forms solution with supporting rules manual
Rollout status – approved in 44 states with a handful outstanding
In Development
Non-Standard Auto
Comprehensive forms solution
Commercial Auto
Forms, Rules, and Loss Costs

15. New Product: PPL – Liability Only
AAIS Personal & Premises Liability
Fully developed program
Forms, Rules, Rating Information
BI & PD except for Products Completed Work Hazard
Med Pay
Fire Legal Liability
Works with a CA FAIR Plan Dwelling Policy

16. Regulatory Challenges
Increased scrutiny of filings
Reversal of long held regulatory positions
Re-emergence of the ‘desk drawer’ rule
Loss of regulatory institutional knowledge

17. Insurtech Insurance + Technology = Insurtech
Use of tech innovations to increase savings and efficiency from the old insurance model
The future of insurance is here
Blockchain, AI, gamification, IoT, automation, etc.
Challenges and opportunities (ctrl+alt+del)
AAIS’s Insurtech Solutions
AAIS’s Stride Insurance Solutions
Policy automation

18. Insurtech AAIS’s Stride Insurance Solutions
Team that collaborates with members on their existing tech
Team that delivers customized programs
Takes advantage of emerging tech to enhance efficiency
AAIS’s Policy Automation
Livraria – product development & maintenance
Kira – machine learning / AI
AAIS clause library

19. Questions