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Washington State Transit Insurance Pool (WSTIP) July 1, 2013/14 Property Insurance Renewal

Washington State Transit Insurance Pool (WSTIP) July 1, 2013/14 Property Insurance Renewal June 27, 2013. Alliant Insurance Services, Inc.  720 Olive Way  Suite 1700  Seattle, W A 98109 PHONE (206) 204-9126-0271  www.alliantinsurance.com . Presentation Outline. Market Conditions

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Washington State Transit Insurance Pool (WSTIP) July 1, 2013/14 Property Insurance Renewal

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  1. Washington State Transit Insurance Pool (WSTIP) July 1, 2013/14 Property Insurance Renewal June 27, 2013 Alliant Insurance Services, Inc.  720 Olive Way Suite 1700  Seattle, WA 98109 PHONE (206) 204-9126-0271  www.alliantinsurance.com

  2. Presentation Outline • Market Conditions • Renewal Approach • Outcome • Vehicle Reporting /Automatic Acquisition

  3. Market Update • 2011 – Enormous Accumulation of losses worldwide: • Flooding, Earthquakes, & Tornadoes • New record for Economic Losses, 2nd most costly Insured losses • 2012 – Better, but super storm Sandy produced significant losses at year end: • 3rd most costly insured losses. • Pressure on “nat-cat” perils: • Flood Zones A&V • Pacific Northwest (PNW) Quake • FM Global & Affiliated FM significantly reducing available Quake capacity in the PNW 3

  4. Change in Commercial Rate (by Account Size): 1999 through 2013 Percentage Change (%) Peak = 2001:Q4 +28.5% Pricing turned positive in Q3:2011, Pricing Turned Negative in Early 2004 KRW : No Lasting Impact Trough = 2007:Q3 -13.6% Source: Council of Insurance Agents and Brokers; Barclay’s Capital; Insurance Information Institute. Note: CIAB data cited here are based on a survey. Rate changes earned by individual insurers can and do vary, potentially substantially.

  5. Renewal Approach • After a challenging 2012 renewal, an extensive marketing plan was deployed for 2013: • Approached several alternative markets to replicate the current program: • “All Risk” placement including Quake & Flood and also coverage for vehicles while in the yard. • Became apparent that while there are markets that are willing to provide insurance to WSTIP, the projected renewal rate via incumbent placement was better than what they could offer. • Simultaneously, we sought to restructure the current program in a more competitive way, also providing better coverage: • Carve-out and place “stand-alone” coverage for the vehicles via an Inland Marine specialist. • Competitive option via Markel has been secured • Convinced the underwriters to bring the CNG facilities back in at the “account rate”.

  6. Outcome – Summary: Year over Year Comparison • 14% composite rate reduction; • TIV up just under 10%; $42,925 overall cost reduction (5.84%) • Reduced self insured retention from $500,000 to $250,000, except for CNG Facilities; • Added “over the road” coverage • The APD coverage will provide Replacement Cost Coverage for vehicles 2003 or newer which are not repairable: • Subject to $250,000 retention

  7. Vehicle Reporting / Automatic Acquisition • Single vehicles valued $750,000 or greater must be reported to the carrier (via WSTIP/Alliant) upon acquisition. • Articulated & Double Decker Busses

  8. Questions ????????????

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