© 2012 ARTHUR J. GALLAGHER & CO.
SORM Statewide Property Insurance Program Overview
PRESENTED BY: Michelle Tooley and
Chris Connelly, ARM-P
Area Senior Vice President
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
Today’s agenda• Purpose of Property Insurance• Overview of SORM State-wide Property Insurance
Program• Insured Risks• Risk Assessment for Natural Hazards (CatNet)• Why obtain a quote• How will you manage your risk
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
•Provides catastrophic protection » Assume small risks» Transfer large risks
•Aids in budget stability» Large losses transferred to
insurers
Purpose of Property Insurance
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
•Designed to provide cost-effective rates and broad coverage to all agencies» Economies of Scale» Broadest policy terms available in market» Stability
•Tailored specifically to risks faced by SORM Agencies
Overview of SORM State-wide Property Insurance Program
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
•Fire•Frozen Pipes & Water Damage•Hail•Flood•Windstorm (tornado, hurricane)•Terrorist Events•Arson•Accidental Breakdown of Equipment
Examples of Risks Insured by Property Program
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
Services Provided •Loss Control Inspections•Appraisals•Thermographic Heat Testing•TOGA – Oil Sample Testing•Boiler Inspections•Architectural Reviews of New Structures•24 Hour / 360 days Claims Contact
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
List of Current Participants
Midwestern State University
Teacher Retirement System
Texas Southern University
Texas Historical Commission
State Office of Risk Management
Department of Public Safety
Department of Motor Vehicles
Sixth Court of Appeals
Texas State Preservation Board
Office of Court Administration
Texas Board of Nursing
Texas Board of Law Examiners
Public Utilities Commission
Credit Union Department
TX Board of Professional Engineering
Texas Juvenile Justice Department
Texas Parks & Wildlife Department
Adjutant General's Office
General Land Office
Texas State Technical College
Department of Banking
Department of State Health Services
University of North Texas
Stephen F. Austin University
Texas Public Finance Authority
University of HoustonTexas Dept. of Housing & Community Affairs
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY140
5
10
15
20
25
30
Property Participants: Policy Period 4/30/2006 -
4/30/2015
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
Annual Premium: Policy Period 4/30/2006 -
4/30/2015
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
Reserves on Twelve Open Property Claims from 2012 - 2014
Water Damage, $1,893,774, 13%
Fire Damage, $980,989, 6%
Windstorm & Hail, $12,034,930, 81%
$14,909,694
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
Twenty-Three Closed Claim Paymentsafter Deductibles 2008 - 2014
Water Damage; 3239262.73; 7%
Fire Damage; 1934895.22; 4%
Windstorm & Hail; 2531792.65; 6%
Hurricane; 37587339.91; 82%
Equipment Breakdown; 434255; 1%
$42,812,209
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
Benefits of Obtaining a Quote?• Requires collection and valuation of state owned assets• Identify the exposures your state owned assets have• Identify the cost to transfer the risk• Determine if it is financially feasible for your agency• If not, explain how your agency will retain the risk and pay for
losses.
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
Statute
Texas state agencies are required to report to the Director, State Office of Risk Management detailed information on existing and potential exposure to loss, including property location and values, descriptions of agency operations, and estimates of maximum probable and maximum possible losses by category of risk. Texas Labor Code § 412.053
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
• SORM Maps All Agency Exposure Data» Provides overview of natural hazards
FloodHurricaneTornadoHail
• Assists in Identifying Catastrophic Exposures• Determines Geographic Concentration of Values
SORM Assistance with Risk Assessment
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
•Provide SORM with feedback on how you are managing the identified exposures at the different locations
•Report to the legislature – State Insurable Asset Study 2011 / 2013
Managing your Risks
© 2012 ARTHUR J. GALLAGHER & CO.© 2012 ARTHUR J. GALLAGHER & CO.
How to Obtain More Information
Sally BalderasSORM Insurance Manager - Property
[email protected](512) 936 – 1483
www.sorm.state.tx.us