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Underwriting Study: What Account Characteristics Drive the Loss Ratio

Underwriting Study: What Account Characteristics Drive the Loss Ratio. May 20, 2003 10:45 AM to 12:00 PM. Presented by Lawrence LaBelle, CPCU. We Were Looking For The Best Practices. Loss Prevention Study. Why. Goals. Data Collection Assist in Selection of Accounts

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Underwriting Study: What Account Characteristics Drive the Loss Ratio

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  1. Underwriting Study: What Account Characteristics Drive the Loss Ratio May 20, 2003 10:45 AM to 12:00 PM Presented by Lawrence LaBelle, CPCU

  2. We Were Looking For The Best Practices Loss Prevention Study Why Goals • Data Collection • Assist in Selection of Accounts • Score the Quality of an Account • Prioritize Loss Control Recommendations • Customize Loss Control Training Plans • Development of Selection Criteria • Identify Positive Account Characteristics • Identify Customer Loss Control Needs • Improve Customer Retention Data Parameters Collection Process • Interviews by Coregis Consultants • Risk Managers and Department Heads • Customized Survey for Each Account • Scored As Policy in Place or Not in Place • Coregis Accounts 7-01-2000 to 7-01-2002 • Municipalities, Schools, Special Districts • Property, Auto, CGL, LEL, POL, ELL • Accounts With Premium > $10,000

  3. Data Analysis • Looked at 5 Years of Coregis Loss Data • Determined Loss Drivers for 90% of Claims • Work OutTM Included Claims, Underwriting and Loss Control • Developed 80 Potential Processes That Could Reduce/Prevent Losses • Standardized Collection Interview Process

  4. Top Loss Drivers What Do You Think We Found?

  5. Automobile • Speed • Backing • Inattentive Drivers • Turning • Law Enforcement • False Arrest • Civil Rights • Jail Suicide Loss Drivers • Property • Arson • Electrical Fire • Wind • CGL • Slip and Fall • Road Maintenance • Thrown Objects • POL/ELL • Employment • Failure to Protect • Zoning

  6. Looked for Established Processes with Owners The Interview • Did the Essential Process Exist? • How Was the Process Documented (or Was It)? • Are the Process Details Written? • Who Is Responsible for the Process? • Are There Controls in Place with Follow Up? • Was There On-Going Process Training? • Physical Review Done on Select Processes

  7. Examples of Essential Processes General Processes • Designated Person Responsible and Accountable for Risk Management • Active Safety Review Process • Business Continuity Plan in Place • Catastrophe Plan in Place Property Processes • Active Participation in WeTip • Security and Inspection Process for Vacant and Unoccupied Buildings • Arson Awareness Training • Storage of Flammable Materials and Chemicals • Fire Department Inspection Report Review Process With Action Plans • Building Self Inspection Program • Computer Lab Electrical System Review Process • Building Maintenance Program With Adequate Budget • Roof Snow Removal Process

  8. Examples of Essential Processes Auto Processes • MVR Analysis Process for All Drivers • Driver Training Program • Substance Abuse Program With Testing • Driver Disciplinary Program • Vehicle Use Policy • Fleet Maintenance Program With Adequate Budget • Pre and Post Trip Inspection Policy POL/ELL Policies • Pre Employment Screening With Background Checks • Employment Hiring Policies • Sexual Harassment Policy With Training for Management and Staff • Updated HR Policy and Procedure Manuals • Training Plan for Newly Elected or Appointed Officials • Employment Practices Help-Line Process

  9. Examples of Essential Processes General Liability Processes • Roadways Surfaces and Traffic Control Self Inspection Process • Road Maintenance and Signage Record Keeping & Follow-Up Process • Roadway Vegetation Control Process With Documentation • Security / Hallway Monitor Policy • Playground Design and Maintenance Process • Walkway Self Inspection Program With Documentation Process • Sexual Harassment Awareness Training for Students • Workplace Violence Program

  10. Examples of Essential Processes Law Enforcement Policies • CALEA Accreditation • Office Training Policy With Appropriate Expenditure Allotment • Use of Force Policy With Supervisor Controls • Law Enforcement Policy and Procedure Manual in Place and Updated • Process for Monitoring Compliance With Policy and Procedures • Prisoner Transportation Policy • Arrest Procedures Policy With Training and Monitoring • Jail Suicide Prevention Procedure • Inmate Account Procedures • Jail Policy and Procedure Manual in Place and Updated

  11. Property

  12. Auto Results

  13. Law Enforcement Results

  14. General Liability

  15. Accountability, Awareness and Training Make the Difference Conclusions • Account Scores Were Useful by Line of Business • We Are Able to Identify Best Practices • Awareness Training on Policies and Procedures Improves Results • Enforcement and Control Processes Improve Results • Accountable Risk Manager Improved Results

  16. Discussion Questions

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