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Umbrella Liability CARe May 7 – 8, 2007. Stephen Kantor. RSUI Group, Inc. 2006 Book of Business. Binding Authority D & O General Liability Professional Liability Property Umbrella . RSUI Group, Inc. 2006 Book of Business. Largest States California Texas

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rsui group inc 2006 book of business
RSUI Group, Inc.2006 Book of Business
  • Binding Authority
  • D & O
  • General Liability
  • Professional Liability
  • Property
  • Umbrella
rsui group inc 2006 book of business1
RSUI Group, Inc.2006 Book of Business

Largest States

  • California
  • Texas
  • Illinois
  • New York
  • Florida
rsui group inc 2006 umbrella book of business
RSUI Group, Inc.2006 Umbrella Book of Business
  • Significant Reinsurance on Umbrella
  • Mostly Treaty, Limited Facultative
  • 5 – 10% is “Supported” Business
rsui group inc 2006 umbrella book of business1
RSUI Group, Inc. 2006 Umbrella Book of Business
  • Excess
    • Higher Limit
    • Higher Attachment Point
  • Umbrella
    • Filed Form
    • Highest Average Premium
  • Lead Excess
    • Follows Underlying
rsui group inc price monitor
RSUI Group, Inc.Price Monitor

Rate Change Factors

  • Underlying GL Limit
  • Underlying Auto Limit
  • Insured GL Limit
  • Insured Auto Limit
  • GL Exposure
  • # Insured Autos
rsui group inc price monitor1
RSUI Group, Inc.Price Monitor

(ILF[U+L] – ILF[U]) current

Limit Change =

(ILF[U+L] – ILF[U])expiring

= Difference in Limits (DIL)

Exposure Change = k (GL Exp Chg) + (1-k) (Auto Exp Chg)

k Depends on the Number of Autos

rsui group inc price monitor2
RSUI Group, Inc.Price Monitor

Premium Change

Rate Change =

(Exposure Change x DIL Change)

rsui group inc price monitor layer pricing
RSUI Group, Inc.Price Monitor – Layer Pricing

$4M xs $1M compared to $1M

$5M xs $5M compared to $4M xs $1M

$10M xs $10M compared to $5M xs $5M

$1st Million is Higher of Actual and ISO Manual

ALWAYS rate the Primary!

rsui group inc tidbits
RSUI Group, Inc.Tidbits
  • Majority of Reported Claims Close Without Payment
  • Reported Claims during 2006 by AY

1990 - 1995 95 New Reports

  • Expected Reporting Patterns

Paid Incurred Claims

Year 1 0% 6% 17%

Year 2 7% 22% 37%

Year 3 24% 44% 52%

Year 10 95% 98% 86%

rsui group inc slices and dices
RSUI Group, Inc.Slices and Dices
  • By Policy Type
  • By Limit
  • By Hazard Grade
  • By SIC
  • By Claim Type
  • Large Losses
  • Excluding Nursing Homes
rsui group inc managing ibnr
RSUI Group, Inc.Managing IBNR
  • Peg Loss Ratio
  • IBNR = (Peg x EP) - Reported Loss
  • Revise when
    • Reported Loss Above Loss Peg
    • Certain Number of Years Past AND
    • Open Claims / Reported Claims < X% OR
    • Paid / Incurred > Y%
  • Consideration – Does Sarbanes-Oxley Change Everything?