eGE Commercial InsuranceCoregis

A Division of ERC

Proprietary Property of GE - Not to be Distributed Externally

Underwriting Study: WhatAccount Characteristics Drive the Loss Ratio

Presented byLawrence LaBelle, CPCU

May 20, 200310:45 AM to 12:00 PM

2

e Loss Prevention Study

Why

• Data Collection

• Assist in Selection of Accounts

• Score the Quality of an Account

• Prioritize Loss Control Recommendations

• Customize Loss Control Training Plans

Goals

• Development of Selection Criteria

• Identify Positive Account Characteristics

• Identify Customer Loss Control Needs

• Improve Customer Retention

Data Parameters

• Coregis Accounts 7-01-2000 to 7-01-2002

• Municipalities, Schools, Special Districts

• Property, Auto, CGL, LEL, POL, ELL

• Accounts With Premium > $10,000

We Were Looking For The Best Practices

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

3

e

• 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

Data Analysis

4

e Top Loss Drivers

What Do You Think We Found?

5

e Loss Drivers

Automobile• Speed

• Backing• Inattentive Drivers

• Turning

Property• Arson

• Electrical Fire• Wind

CGL• Slip and Fall

• Road Maintenance• Thrown Objects

POL/ELL• Employment

• Failure to Protect• Zoning

Law Enforcement• False Arrest• Civil Rights• Jail Suicide

6

e 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

Looked for Established Processes with Owners

7

e 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

eAuto 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

Examples of Essential

Processes

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

eGeneral 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

Examples of Essential

Processes

10

eLaw 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

Examples of Essential

Processes

11

e Property

Property Results

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Ars

on

Aw

aren

ess

Tra

inin

gp

roce

ss i

np

lace

Pre

197

0B

uil

din

gs

Insp

ecti

on

&C

on

tro

lp

roce

ss

Co

mp

ute

r la

bel

ectr

ical

sy

stem

sin

spec

tio

np

roce

ss i

n

Bu

ild

ing

M

ain

ten

ance

Pro

gra

m &

adeq

uat

eb

ud

get

in

Mo

st C

urr

ent

Fir

eD

epar

tmen

tIn

spec

tio

nR

epo

rt

% R

esp

on

se

0%

20%

40%

60%

80%

100%

120%

140%

% Loss Ratio Difference% Respond NO % Respond YES Risk Separation

12

e Auto Results

Auto Results

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%

Dri

vin

g t

ips

and

sea

son

alu

pd

ate

trai

nin

gp

roce

ss i

n

Dri

ver

trai

nin

gp

rog

ram

s in

pla

ce

MV

Ran

alys

isp

roce

ss f

or

all

dri

vers

in

pla

ce

Pre

Hir

eR

oad

Tes

tP

oli

cy i

np

lace

% R

esp

on

ses

0.00%5.00%10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%50.00%

% L

oss

Rat

io D

iffe

ren

ces

No Response Yes Response Risk Separation

13

e Law Enforcement Results

Law Enforcement Results

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

Inm

ate A

ccoun

ting P

roce

dure

s

Jail S

uicide

Pre

vent

ion P

olicy

Use o

f Forc

e Polic

y with

Supe

rviso

r Con

trols

Law E

nforc

emen

t P &

P M

onitor

ing P

olicy

Arrest

Proce

dure

s Polic

y w/ T

raini

ng

Jail P

olicy

and

Pro

cedu

re M

anual

Lega

l Rev

iew o

f Poli

cy a

nd P

roce

dure

Man

ual

HR Poli

cy fo

r Non

Compli

ance

Law E

nforc

emen

t Polic

y & P

roce

dure

Manu

al

Prisone

r Tra

msp

orta

tion

Policy

CALEA A

ccre

diatio

n

Office

r tra

ining

with

bud

get a

llotm

ent

% R

espo

nses

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

% L

oss

Rat

io D

iffer

ence

No Response Yes Response Risk Separation

14

e General Liability

General Liability Results

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

Roa

dway

Veg

etat

ion

Con

trol

Roa

dway

sur

face

s an

d T

raff

icC

ontr

ol

Sex

ual H

aras

smen

t T

rain

ing

Pro

cess

Sec

urity

/ H

allw

ay M

onito

rs

Wal

kway

Sel

f In

spec

tion

Pre

Em

ploy

men

t S

cree

ning

Sex

ual H

aras

smen

t po

licy

Pla

ygro

und

Mai

nten

ance

Pro

cess

Wor

kpla

ce V

iole

nce

Pol

icy

% R

esp

on

ses

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

% L

oss

Rat

io D

iffe

ren

ces

No Responses Yes Responses Risk Separation

15

e 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

Accountability, Awareness and Training Make the Difference

16

e

Discussion Questions