Preserving Educational Budgets by Reducing Insurance Costs: Creating Your Own Insurance Company

1. Preserving Educational Budgetsby Reducing Insurance Costs:Creating Your Own Insurance Company Presented by: Jim Blumreich, Chief Financial Officer Northeast Wisconsin Technical College Steve Stoeger-Moore, Executive Vice President Districts Mutual Insurance

2. Presentation Outline • History • Process • Keys to Success • Benefits

4. Education Exposures • Property & contents • Athletics • Student health • Employees • Auto • Shop and labs • D&O • Fiduciary liability • Sexual harassment • Hiring/firing • Transportation • Residence halls • Collectibles • Foreign travel • Employee dishonesty/crime • Business travel accident

5. History • Group program preceded DMI • Created by 6, eventually grew to 15 colleges • Developed “trust” of working together • Spread the risk • Cooperative environment developed • Laid the groundwork • Large enough exposure base to bargain as a group • No individualized loss control • Pay the premium, we’ll pay the claims • Group buying, no special services • Coverage gaps

6. History • Trust paid out $26M, $5M in losses • 22% loss ratio • Premium increases were double digits • Budget impact • Intent to control risk management • Often neglected – especially at small institutions • Champions

7. Timeline

8. Keys to Success

9. Risk Funding Options • Captive • Rent-a-Captive • Stock Company • Group Program • Pool • Mutual Company

10. Coverage Issued • Coverages not noted are covered by WTCS Trust program

11. Program Retention Levels Statutory Reinsurance Work Comp Statutory Reinsurance Work Comp $4,650,000 Reinsurance $350,000,000 Excess Including TRIA and Inland Marine $100,000,000 Boiler Reinsurance $4,650,000 Reinsurance $4,650,000 Reinsurance $3,000,000 Reinsurance $650,000 X/S $350,000 Reinsurance $225,000 Company Retention $345,000 Company Retention $345,000 Company Retention $250,000 Company Retention $350,000 Company Retention $250,000 Company Retention $25,000 Member Deductible $25,000 Member Deductible $5,000 Member Deductible $5,000 Member Deductible $100,000 Member Deductible Boiler & Machinery Property General Liability Auto Liability ELL Work Comp Aircraft Work Comp

12. Organization Board of Directors Consultant Legal Counsel Actuary Accountant Executive Vice President Auditor Administrative Support Risk & Loss Control Consultant Bank Claims Broker Property, Casualty & Workers Compensation Program Coverages: Equipment Breakdown - Educators Legal - Property & Machinery / Inland Marine - General Liability - Commercial Auto - Workers Compensation - Campus Violent Acts Ancillary Coverages Foreign Liability Fidelity Bond Crime Business Travel Accident

13. Funding

14. Benefits

15. Worker Compensation

16. Where Do We Go From Here

17. Awards & Recognition

18. Summary • Reduce insurance costs by creating your own insurance company • Resources • Champion • Feasibility funding It can be done!

19. Jim Blumreich Steve Stoeger-Moore Questions? Northeast Wisconsin Technical College Chief Financial Officer james.blumreich@nwtc.edu 920.498.5701 Districts Mutual Insurance Executive Vice President steve@districtsmutualinsurance.com 605.422.2655 Presentation handout available on ACCT website.Thank You