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Umbrella Liability CARe May 7 – 8, 2007

Umbrella Liability CARe May 7 – 8, 2007. Stephen Kantor. RSUI Group, Inc. 2006 Book of Business. Binding Authority D & O General Liability Professional Liability Property Umbrella . RSUI Group, Inc. 2006 Book of Business. Largest States California Texas

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Umbrella Liability CARe May 7 – 8, 2007

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  1. Umbrella Liability CAReMay 7 – 8, 2007 Stephen Kantor

  2. RSUI Group, Inc.2006 Book of Business • Binding Authority • D & O • General Liability • Professional Liability • Property • Umbrella

  3. RSUI Group, Inc.2006 Book of Business Largest States • California • Texas • Illinois • New York • Florida

  4. RSUI Group, Inc.2006 Umbrella Book of Business • Significant Reinsurance on Umbrella • Mostly Treaty, Limited Facultative • 5 – 10% is “Supported” Business

  5. RSUI Group, Inc. 2006 Umbrella Book of Business • Excess • Higher Limit • Higher Attachment Point • Umbrella • Filed Form • Highest Average Premium • Lead Excess • Follows Underlying

  6. RSUI Group, Inc.Price Monitor Rate Change Factors • Underlying GL Limit • Underlying Auto Limit • Insured GL Limit • Insured Auto Limit • GL Exposure • # Insured Autos

  7. RSUI Group, Inc.Price Monitor (ILF[U+L] – ILF[U]) current Limit Change = (ILF[U+L] – ILF[U])expiring = Difference in Limits (DIL) Exposure Change = k (GL Exp Chg) + (1-k) (Auto Exp Chg) k Depends on the Number of Autos

  8. RSUI Group, Inc.Price Monitor Premium Change Rate Change = (Exposure Change x DIL Change)

  9. RSUI Group, Inc.Price Monitor – Layer Pricing $4M xs $1M compared to $1M $5M xs $5M compared to $4M xs $1M $10M xs $10M compared to $5M xs $5M $1st Million is Higher of Actual and ISO Manual ALWAYS rate the Primary!

  10. RSUI Group, Inc.Tidbits • Majority of Reported Claims Close Without Payment • Reported Claims during 2006 by AY 1990 - 1995 95 New Reports • Expected Reporting Patterns Paid Incurred Claims Year 1 0% 6% 17% Year 2 7% 22% 37% Year 3 24% 44% 52% Year 10 95% 98% 86%

  11. RSUI Group, Inc.Slices and Dices • By Policy Type • By Limit • By Hazard Grade • By SIC • By Claim Type • Large Losses • Excluding Nursing Homes

  12. RSUI Group, Inc.Managing IBNR • Peg Loss Ratio • IBNR = (Peg x EP) - Reported Loss • Revise when • Reported Loss Above Loss Peg • Certain Number of Years Past AND • Open Claims / Reported Claims < X% OR • Paid / Incurred > Y% • Consideration – Does Sarbanes-Oxley Change Everything?

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