Symposium 2016

MAY 10–12, 2016 GEN RE HOME OFFICE, STAMFORD, CT

A Company Reinsurance Symposium 2016

MAY 10–12, 2016 | GEN RE HOME OFFICE, STAMFORD, CT

The Strategic Use of Facultative Presented by Anne Caliento and Steve Moran

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 2 A Little About Us

Anne Steve

• Started with GPF in in 1989 • Started with GCF in Kansas City in 2001 • Branch Underwriter since 1991 • Casualty Branch Manager since 2009 • Graduated from Hope College in MI with • Graduated from Westmar College in Iowa a BA in Business with a BA in Business Management • Prior to Gen Re worked for the Four • Prior to Gen Re worked in Des Moines and Seasons Hotel in Chicago Omaha with Travelers and ERC in KC • Team Leader for REGIONAL Client • Team Leader for REGIONAL Client Segment Segment - Property Casualty

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 3 Fac Trivia

Which City was the First Gen Re Facultative office opened?

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 4 • Reinsurance Products

• Fac or Fiction

• Prop Fac

Agenda • Cas Fac

• Programs / Bundled Fac

• The Direct Model

• Takeaways

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 5 Spectrum of Reinsurance Products

Major Types of Reinsurance Treaty FACULTATIVE PROGRAMS TREATY • Certain group or class of business reinsured under a single contract • While in force, neither party has an option to ceding and assuming risk related to the business covered under the contract Facultative • Separate reinsurance contract Pro Rata Excess of Loss negotiated on each risk • The ceding company retains the right (faculty) to purchase reinsurance on an individual risk

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 6 Fac or Fiction

What do YOU think of when you hear the word “Fac?” Fac or Fiction

• Facultative is only used by Stock Companies • Using Facultative creates extra work for underwriters • Facultative is additional cost and expense • Facultative can turn a bad risk into a good risk • Facultative is only useful for high excess capacity • Facultative is only bought on fire perils

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 7 Fac or Fiction

Can Facultative be a useful TOOL? Fac or Fiction

• Can Facultative help Grow your Business? • The best layer to buy Facultative is the frequency layer. • Can Facultative help Retain Your Business? • Facultative coverage never pay claims? • Can Facultative help Improve Your Underwriting?

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 8 Motivations For Purchasing Facultative

Grow Retain Improve Underwriting

• Tough piece of otherwise • Treaty exclusion • We see a wide scope of risks acceptable account (carve • Treaty protection • Underwriting expertise and out) • Good risk with new severity second opinion • Cover the “gap” between exposures • Emerging issues Treaty and net risk appetite • Good risk with recent large • New line of business losses • Accommodation business • New / Difficult jurisdiction for an important agent

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 9 Fac or Fiction (I need a low quote)

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 10 Use Fac to Write MORE Profitable Business Not JUST the Line/Exposure in question

AUTO WORKERS’ COMP

GENERAL LIABILITY PROPERTY

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 11 Use Fac to Write MORE Profitable Business Use Fac to Bring them Back

AUTO WORKERS’ COMP

GENERAL LIABILITY PROPERTY

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 12 Trivia

What event can insurance as we know it today, be traced?

A. Fire B. Chicago Fire C. Titanic D. Fire

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 13 Property Coverages

Perils Coverages

• All Risk • Building, Personal Property, Business Income / Business Interruption • Named Perils and EC • Boiler and Machinery / Equipment Breakdown • Flood • Inland Marine • Wind • Service Interruption • Earthquake • Contingent Time Element • DIC • Other • Other

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 14 Property – Classes of Business

From Homeowners to Petrochemical – The Good, The Bad, The Ugly • Residential / Homeowners • Agricultural • Retail and Service • Vacant Properties • Manufacturing / Processing • Petrochemical, Pulp and paper, Semiconductor • Warehousing / Storage • Fidelity and Crime • Auto Physical Damage • Inland Marine Coverage

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 15 Property Facultative – Carve Out Examples

FAC Helps You Reduce Volatility and Unknowns

• Spot location – That one unique risk on a schedule • Nat Cat Perils – Flood, EQ, Wind, etc. • Unprotected risks • Impaired risks • Builders risks • Dealer’s Open Lot • Jewelry and fine arts (schedules and individual items) • High-valued vehicles • Transit Exposures (single trip and annual floaters) • DIC • Contractors Equipment

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 16 Insurance Trivia

Per FMCSA the Average Fatal Large Truck Accident Costs?

A. $1,350,000 B. $2,250,000 C. $2,710,000 D. $3,800,000

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 17 Casualty - The Basics

The Common Stuff Specialty Lines • Auto • EPLI • GL • Product Recall • Products • Med Mal • Premises • E&O • Umbrella • D&O • Excess • LPL • Liquor Liability • OCP/RRP • WC… > Normal attachment is 500K > Up to 5M in capacity

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 18 Casualty: Real Life Examples

• Workers Comp • GL – Regular – Discontinued Products – Carve outs – Tail / ERP coverage • Industrial Aid Aircraft – Designated events, locations, jobsites, states • Transportation, Scuba divers, pit crews (NYLL) • Auto • Umbrella – Carve out auto or GL only, – UM only (perhaps in a certain state) PERSONAL! – Poor driver(s) (MVR) (Age) • Unique Risk …or just near or related to what – Carve-out of any and every vehicle type (Bus, is unique for your appetite. limo, LHTT, 15 passenger van, etc.)

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 19 Insurance Trivia

What is the longest continuously operating insurance company in the world?

A. Munich Insurance Holding B. Lloyds #468 C. Royal & SunAlliance Group D. Swiss Insurance

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 20 Programs

FACULTATIVE PROGRAMS TREATY

Pro Rata Excess of Loss

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 21 What is a Gen Re Facultative Program?

Combines the Elements of

Individual underwriting and pricing approach of Facultative reinsurance

Guaranteed capacity and transactional efficiency of a Treaty

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 22 Benefits of a Gen Re Facultative Program

• Easy to Use – One screen, few fields to fill • Instantaneous Response – Ability to quote, bind and endorse via the application • Automatic access to guaranteed capacity for all risks within agreed parameters • Customized specifically for your portfolio • Cost-effective, competitive pricing • Efficient processing • Agreements are mutually reviewed each year

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 23 Gen Re Connect - https://www.genre-connect.com

Streamlined Facultative Solutions

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 24 Facultative and our Direct Distribution Model

• Gen Re is a global organization that sees a variety of buying habits

• 14 offices in North America, 33 offices across the globe , Boston, Chicago, Columbus, , Hartford, Kansas City, , , New York, , San Francisco, Stamford,

• Benefits: – Fast turnaround – Local / specific underwriting knowledge – Access to broad network of expertise – Underwriter-to-underwriter conversations

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 25 Takeaways

Facultative can help you GROW your business.

Facultative’s DIRECT distribution model ensures the highest quality underwriting interactions.

Our Facultative PROGRAMS are an effective and efficient solution to guaranteed capacity and pricing.

Facultative Certificates can be purchased for a VARIETY of risk transfer needs. (Grow/Retain/Improved)

A Property or Casualty Facultative Underwriter is READY for your call.

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 26 Reinsurance Symposium 2016

Thank you! Anne Caliento / 617 728 3803 / [email protected] Steve Moran / 913 661 6924 / [email protected]

Reinsurance Symposium 2016 | The Strategic Use of Facultative | Presented by Anne Caliento and Steve Moran 27