Aon Product Recall & Contamination | Crisis Management

Exposure and Coverage Overview

Automotive Product Recall Risk Management & Insurance SAA March 27, 2019

Mike Stankard Automotive Industry Practice Leader

2 Prepared by Crisis Management Proprietary and Confidential | 2019 ed.

Trends for Product Recall Insurance

Contractual Compliance

• Primarily European supply/ OEM Contracts • Increasing Trend in U.S. Contracts

Financial

• Earning Stability / Balance Sheet Protection • Recent emphasis by OEMs of intended chargebacks • Interested in risk transfer at low attachment point

• Catastrophic Protection • Mid-Large Tier 1’s

Strategic / Enterprise

• M&A Related • Board Governance

Aon Risk Solutions Nexteer Automotive Product Recall Renewal Strategy – 3.27.18 3

Covered Losses - Options

1st Party Recall

• Recall costs • Repair, replace, refund of product • Consulting costs • Defense costs

3rd Party Recall

• Recall Campaign costs • Labor for repair, replacement or refund • Un-install / re-install Labor cost

3rd Party Financial

• Financial loss

4 Prepared by Crisis Management Proprietary and Confidential | 2019 ed.

2014-2018 Product Recall & Contamination Insurance Capacity

5 Prepared by Crisis Management Proprietary and Confidential | 2019 ed.

Contract specific Product specific Customer specific All products Captive utilization / participation Catastrophic high retention /limit program

Programs designed around specific exposures Retention levels set to risk tolerances Ample capacity to build large limit program Market access driven by Risk Management goals Premiums driven by exposures covered Ability to leverage Global GL program with London

placement

Coverage Offerings Customized to meet the insured’s goals