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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 - PowerPoint PPT Presentation
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Liberty International Underwriters
University of HoustonEnergy Panel
Steven P. Weiss, CPCU, AMIM, NAMS-CMS
Vice President – Marine Risk Engineering and Project Cargo
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A little humor
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Energy Case Study
• Discussion of how the pieces fit together– Assured– Agent/Broker/Wholesale Broker– Insurance Company– Reinsurance Company
• Liberty Mutual
• Willis Loss Data base
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Insurance Flow
Assured
Broker/Agent
Wholesale Broker
Underwriter
Reinsurer
Reinsurance Broker
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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
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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
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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
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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
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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
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Reinsurer
• Insures who insure other Insurance companies
• Pay commission to Reinsurance Broker
• Often pay override to the ceding insurer
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Liberty Mutual
Liberty Mutual
Agency Markets Commercial Markets Personal Markets Liberty International
Liberty International
UnderwritersLM Surety Safeco Regional Companies
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LM by the Numbers - 2007
2007
ActualCommercial Markets $6,489,000,000
Personal Markets 5,829,000,000
Agency Markets 5,569,000,000
Liberty International 6,148,000,000
Other 1,926,000,000
Total $25,961,000,000
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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 standing1.AM Best – A (Excellent)2.Moody’s – A2 (Good)3.Standard & Poor’s – A- (Strong)
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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
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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
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Examples
• Willis losses.pdf
• https://online1.willis.com/sites/EL/W_ELViewer.aspx
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Other Resources
• http://www.iii.org/
• http://www.aicpcu.org/
• http://www.libertymutual.com
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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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