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University of Houston Energy Panel

University of Houston Energy Panel. Steven P. Weiss, CPCU, AMIM, NAMS-CMS Vice President – Marine Risk Engineering and Project Cargo. A little humor. Discussion of how the pieces fit together Assured Agent/Broker/Wholesale Broker Insurance Company Reinsurance Company Liberty Mutual

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University of Houston Energy Panel

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  1. University of HoustonEnergy Panel Steven P. Weiss, CPCU, AMIM, NAMS-CMS Vice President – Marine Risk Engineering and Project Cargo

  2. A little humor

  3. Discussion of how the pieces fit together Assured Agent/Broker/Wholesale Broker Insurance Company Reinsurance Company Liberty Mutual Willis Loss Data base Energy Case Study

  4. Insurance Flow Assured Broker/Agent Wholesale Broker Underwriter Reinsurance Broker Reinsurer

  5. Assured • The Assured is the purchaser of the insurance • Normally through Broker or Agent • Pays Commission or fee for services to Broker • Pays premium to Underwriter

  6. Broker/Agent • One who for commission or fee, brings parties together and assists in negotiating contracts between them • Representative of the Assured • Receives Fee for service from Assured or commission from Underwriter • Many are very well trained and knowledgeable • Also know as the Retail Broker/Agent

  7. Wholesale Broker • Intermediary between retail Broker/Agent and Underwriters if the B/A does not have the proper market • Normally commission paid by Underwriter • Represents the Insured sort of as well as the retail broker

  8. Underwriter • Reviews the risk as presented by the broker • If the risk is within appetite then assumes the risk for the loss of life, property or finances of another • Pays commission to the Broker if agreed up front

  9. Reinsurance Broker • One who for commission or fee, brings parties together and assists in negotiating contracts between them • Places insurance for insurance companies • Normally commission paid by reinsurer

  10. Reinsurer • Insures who insure other Insurance companies • Pay commission to Reinsurance Broker • Often pay override to the ceding insurer

  11. Liberty Mutual

  12. LM by the Numbers - 2007

  13. Financial Highlights LIU • LIU 2007 Premium – over $2.5B • Liberty Mutual 2007 Worldwide Revenue of $25.5 Billion up from $23.5 Billion in 2006 • Statutory Surplus - $14.0B (7.0% increase) • Total Assets – Over US$85 billion • World-class Fortune 100 (# 94) financial standing • AM Best – A (Excellent) • Moody’s – A2 (Good) • Standard & Poor’s – A- (Strong)

  14. Willis Data base • Collection of losses in excess of USD 1,000,000 at time of loss since 1972 • May or may not have been insured • Does not account for sublimits • 8,011 losses since 2008 • 124 plus billion in dollars

  15. Willis Loss Database - uses • Project comparing premium vs losses to see how tight margins actuall are • Can specify OEE – operators extra expense • Blow outs and well control costs • Operational • What insurance is rated on • Can also compare CAT to operational

  16. Examples • Willis losses.pdf • https://online1.willis.com/sites/EL/W_ELViewer.aspx

  17. Other Resources • http://www.iii.org/ • http://www.aicpcu.org/ • http://www.libertymutual.com

  18. Summary • A bit on Insurance operations • A bit on Liberty Mutual • A bit of the Willis loss data base • What questions do you have for me?

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