1. © 2012 ARTHUR J. GALLAGHER & CO. SORM Statewide Property Insurance Program Overview PRESENTED BY: Michelle Tooley and Chris Connelly, ARM-P Area Senior Vice President

2. © 2012 ARTHUR J. GALLAGHER & CO. Today’s agenda Purpose of Property Insurance Overview of SORM State-wide Property Insurance Program Insured Risks Risk Assessment for Natural Hazards (CatNet) Why obtain a quote How will you manage your risk

3. © 2012 ARTHUR J. GALLAGHER & CO. Provides catastrophic protection »Assume small risks »Transfer large risks Aids in budget stability »Large losses transferred to insurers Purpose of Property Insurance

4. © 2012 ARTHUR J. GALLAGHER & CO. Designed to provide cost-effective rates and broad coverage to all agencies »Economies of Scale »Broadest policy terms available in market »Stability Tailored specifically to risks faced by SORM Agencies Overview of SORM State-wide Property Insurance Program

5. © 2012 ARTHUR J. GALLAGHER & CO. Fire Frozen Pipes & Water Damage Hail Flood Windstorm (tornado, hurricane) Terrorist Events Arson Accidental Breakdown of Equipment Examples of Risks Insured by Property Program

6. © 2012 ARTHUR J. GALLAGHER & CO. Services Provided Loss Control Inspections Appraisals Thermographic Heat Testing TOGA – Oil Sample Testing Boiler Inspections Architectural Reviews of New Structures 24 Hour / 360 days Claims Contact

7. © 2012 ARTHUR J. GALLAGHER & CO. List of Current Participants Midwestern State University Teacher Retirement System Texas Southern University Texas Historical Commission State Office of Risk Management Department of Public Safety Department of Motor Vehicles Sixth Court of Appeals Texas State Preservation Board Office of Court Administration Texas Board of Nursing Texas Board of Law Examiners Public Utilities Commission Credit Union Department TX Board of Professional Engineering Texas Juvenile Justice Department Texas Parks & Wildlife Department Adjutant General's Office General Land Office Texas State Technical College Department of Banking Department of State Health Services University of North Texas Stephen F. Austin University Texas Public Finance Authority University of Houston Texas Dept. of Housing & Community Affairs

8. © 2012 ARTHUR J. GALLAGHER & CO.

10. Reserves on Twelve Open Property Claims from 2012 - 2014

11. © 2012 ARTHUR J. GALLAGHER & CO. Twenty-Three Closed Claim Payments after Deductibles 2008 - 2014

12. © 2012 ARTHUR J. GALLAGHER & CO. Benefits of Obtaining a Quote? Requires collection and valuation of state owned assets Identify the exposures your state owned assets have Identify the cost to transfer the risk Determine if it is financially feasible for your agency If not, explain how your agency will retain the risk and pay for losses.

13. © 2012 ARTHUR J. GALLAGHER & CO. Statute Texas state agencies are required to report to the Director, State Office of Risk Management detailed information on existing and potential exposure to loss, including property location and values, descriptions of agency operations, and estimates of maximum probable and maximum possible losses by category of risk. Texas Labor Code § 412.053

14. © 2012 ARTHUR J. GALLAGHER & CO. SORM Maps All Agency Exposure Data »Provides overview of natural hazards  Flood  Hurricane  Tornado  Hail Assists in Identifying Catastrophic Exposures Determines Geographic Concentration of Values SORM Assistance with Risk Assessment

15. © 2012 ARTHUR J. GALLAGHER & CO. Provide SORM with feedback on how you are managing the identified exposures at the different locations Report to the legislature – State Insurable Asset Study 2011 / 2013 Managing your Risks

16. © 2012 ARTHUR J. GALLAGHER & CO. How to Obtain More Information Sally Balderas SORM Insurance Manager - Property Sally.balderas@sorm.state.tx.us (512) 936 – 1483 www.sorm.state.tx.us