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University of Houston Energy Case Study. Steven P. Weiss, CPCU, AMIM, NAMS-CMS Vice President, Marine Engineering and Project Cargo. What are we going to do?. What is Risk Management What is risk financing What is the insurance industry and how does that play with Risk Management - PowerPoint PPT Presentation
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Liberty International Underwriters
University of HoustonEnergy Case Study
Steven P. Weiss, CPCU, AMIM, NAMS-CMS
Vice President, Marine Engineering and Project Cargo
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What are we going to do?
• What is Risk Management • What is risk financing• What is the insurance industry and
how does that play with Risk Management
• How do the insurance players all interact
• Who are the major players• Take a submission from cradle to
grave
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What is Risk Management
• The identification, control and management of risks/hazards within an environment to ensure that they are always at a tolerable or negligible level
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How is this done?
• There are five steps – The identification and analyses of loss
exposures– Examination of the feasibility of
Alternative Risk management Techniques– Selection of the best Risk management
techniques– Implementation of the techniques– Continual monitoring of the program
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The identification and analyses of loss exposures
• What are the exposures?
–First Party
–Third Party
–Financial
–Employee
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The identification and analyses of loss exposures (cont)
• First Party
–Own Property
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The identification and analyses of loss exposures (cont)
• Third Party
–Contractual
–Personal Injury
–Property Damage (others)
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The identification and analyses of loss exposures (cont)
• Financial
–Business Interruption
–Delay in Start Up
–Self Insured Retentions
–Deductible
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The identification and analyses of loss exposures (cont)
• Employee– Workers Comp– Jones Act– Longshore and Harbor Workers
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Examine feasibility of Alternative Risk Management Techniques
• Contracts to transfer risk
• Training of Employees
• Engineering solutions
• Exit lines of business
• Contractors
• Insurance
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Selection of the best Risk management techniques
• In my situation, what works best?– Probably some combination of the above
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Implementation of the techniques
• Get the contracts signed
• Engineer and install the solutions
• Exit/sell lines of Business
• Find the proper contractors
• Purchase the Insurance
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Risk Financing
• What is Risk Financing
• Where do you get it?– Deductibles/Self Insured Retentions– Mutual Agreements– Cash flow– Insurance
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Insurance Industry
Insured
Broker/Agent
Insurance
Company
Reinsurance
Company
Insurance
Company
Broker/Agent
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Flow of Business
Insured
Broker
Insurance
CompanyReinsurer
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Top Global P&C Companies
($ billions)Rank Company
1 State Farm $35.0 2 Allianz 29.2 3 AXA 20.7 4 Zurich Insurance 18.6 5 Allstate 18.6 6 AIG 18.3 7 Royal & Sun Alliance 12.8 8 Winterthur 12.4 9 Assicurazioni Generali11.5 10 Munich Re 11.4
Gross Written
Rank Company Premium $ %
1Allianz $63.8 34.6119% 2AIG 56.7 38.4210% 3State Farm 50.2 15.243% 4AXA 38.2 17.5 84% 5Zurich 37.2 18.6100% 6Liberty Mutual + Safeco 34.3 28.0444% 7Assicurazioni Generali 32.4 20.9181% 8Munich Re 32.1 20.7181% 9Allstate 30.0 11.461%
10Berkshire Hathaway 24.9 20.0408%
1996 2008 ’96 – ‘08 Increase
Liberty Mutual 6.3Source: Company Filings
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Top U.S. P&C Companies
($ billions)
Rank Company DWP
1 State Farm $35.0 2 Allstate 18.0 3 AIG 13.5 4 Zurich Insurance12.3 5 Travelers 9.0 6 Nationwide 8.6 7 CNA 7.1 8 Liberty Mutual 5.8 9 Hartford 5.610 USAA 4.7
Rank Company DWP
1 State Farm $49.9 2 AIG 32.1 3 Zurich Insurance 28.2 4 Allstate 26.8 5 Liberty Mutual 26.3 6 Travelers 21.8 7 Berkshire Hathaway16.2 8 Nationwide 15.8 9 Progressive 13.810 Hartford 11.1
Source: Highline Data ServicesNote: LMG includes a full year of Safeco
1996 2008
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The path of a submission
Choosing a
Broker
Submission of
Quotes
Genesis of a
Project
Preparation
Of a
submission
Market
Presentation
Binding of a
Project
Project
Life
Completion
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Here is what we discussed
• What is Risk Management • What is risk financing• What is the insurance industry and
how does that play with Risk Management
• How do the insurance players all interact
• Who are the major players• Take a submission from cradle to
grave
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Do you
• Have any questions?