beecher carlson all lines presentation
TRANSCRIPT
MARA | Multivariate Algorithm for Risk Analysis (MARA) evaluates approximately 4,000 metrics to determine and assess your company’s risk drivers
passion. innovation. accountability.
Introduction to Beecher Carlson>
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Beecher Carlson Overview
Ranked as the 6th largest insurance brokerage in the
United States and the 7th largest
brokerage worldwide by
Business Insurance magazine.
Revenues in excess of $1.58B and
places more than $13.5B of premium into the insurance
marketplace.
More than 7,000 employees with
offices in 131 cities across the U.S.,
London and Bermuda
International Correspondents located in over
100 countries and have offices in over 500 cities
around the globe. Including offices in London, Bermuda
and Cayman Islands.
Our evaluation of exposures in the pre-underwriting stage and quality
of submissions results in a Quote-
to-Bind ratio of around 40% much higher than the
industry average of 15% to 18%.
Beecher Carlson is the large account subsidiary of Brown and Brown that delivers expertise by industry focus and product specialization. At Beecher Carlson, we believe risk management without passion, innovation and accountability is just
buying insurance.
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Competitive Differentiators
123456
We have total flexibility to use the best insurance providers, vendors, resources, foreign brokers, wholesalers, claims attorneys and forensic accountants that create a “best in breed” solution.
Nearly 40% of our Casualty staff is dedicated to claims, risk control and analytics. Our competitors average is 7-9% in claims and analytics staff.
Our evaluation of exposures in the pre-underwriting stage and quality of submissions results in a Quote-to-Bind ratio of around 40%, much higher than the industry average of 15% to 18%.
Global profit center model allows our clients complete access to our national, top-tier resources without complicated political structures or local profit center mentalities. Service teams are determined based on knowledge and clients needs rather than geographic convenience.
Strong individual carrier relationships at the highest levels.
Complete market access to all worldwide insurance markets.
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Beecher Carlson Awards
Business Insurance’s Readers Choice Award 2009 was based on the best combination of: Innovation, Service, Quality and Value
Ranked #1 in Innovation in Captive Management by U.S. Captive for 2013
AutoZone's 2013 Partner Excellence AwardAward recognizes high performing partners that are leading in their industryPARTNER EXCELLENCE AWARD
2013 , 2014 & 2015 Top Insurance and Professional Services Organizations for Diversity and Inclusiveness recognized by Exelon
Captive Manager of the Year 2012 Recognized excellence in the delivery and management of captive insurance
Ranked #1 in Favorability by Greenwich Associates in 2011 based on the key attributes of: Ethicality, Flexibility, Likelihood to Recommend, Client Satisfaction, Prompt Follow-up, Addressing Policy Issues with Adequate Time Before Renewal, Compensation and Pricing, Innovativeness of Brokerage(Survey discontinued in 2012)
Business Insurance’s Readers Choice Award 2010 was based on the best combination of: Innovation, Service, Quality and Value(Award discontinued in 2011)
Ranked #1 in Favorability by Greenwich Associates in 2010 based on the Key attributes of: Customer Service, Ease of Working Relations, Flexibility, Securing Best Prices and Understanding Business Needs
Captive Manager of the Year 2015 Recognized excellence in the delivery and management of captive insurance
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Beecher Carlson Innovations
MARA
MARA | Multivariate Algorithm for Risk Analysis (MARA) evaluates approximately 4,000 metrics to determine and assess your company’s risk drivers
passion. innovation. accountability.
Specializations>
Focus• Expertise in power generation with a
special focus on independent power market
• Innovative solutions for prototypical equipment, replacement power, political risk, trade disruption, forced outage, lack of resource, control of well, warranty and performance guarantee
Highlights• Placed Builder’s Risk insurance policy for
the largest wind farm in the U.S.• Developed the first project specific
Extended Warranty Wrap and Performance Guarantee program for the largest solar project in the world
• Placed coverage for the largest fleet of Frame 7 Gas Turbines (GE 7FA & Siemens Westinghouse 501F)
• Energy specific Loss Control / Claims / Captive Solutions
• Recognized expert in construction and operational coverage for independent power plants worldwide
• Out-sourced risk management platform providing cost of capital/reserving analysis, manuscript contract language, lender consultation, RMS/CAT modeling and project development and M&A consultation
Energy Casualty
Focus• Large accounts with annual expected up
to, and greater than, $100M; Alternative risk financing arrangements including, but not limited, to large deductible, deductible buy back policies, qualified self-insurance, corridor retention programs, incurred/paid retros, captive utilization
Highlights• Utilize in brokerage process and provide
to clients the analytical tools required to make educated risk financing purchasing decisions. Each risk management client has a designated actuarial and analytics team
• Utilize proprietary ZOOM® process that combines the science of predictive analytics and data mining with hands-on claims consulting and loss control engineering expertise
• Dedicate nearly 40% of staff to managing clients’ retained losses (90% of their total cost) through claims, risk control and analytics, versus competitors 7-9%
• Team setting strategy and executing that strategy in the market continues to service the client throughout the life of the program 24/7/365
Beecher Carlson Specializations
Real Estate
Focus• Office complexes/towers, large
apartment owners and shopping centers
• Specialize in soft occupancy companies with large CAT exposures (wind, flood and earthquake)
Highlights• Pre-underwrite risk by running
our proprietary CAT models• Expert in utilizing Tenant Liability
insurance to benefit owner/managers as well as tenants
Beecher Carlson Specializations
Focus• Managed Care
(provider, employer and HMO stop loss)
• Academic Medical Centers
• Healthcare Systems (Acute, Long Term Care, Psychiatric, Ancillary Care)
• Physician Groups
Highlights• Largest division of
Beecher Carlson• Proprietary PULSE™
technology allows information access for healthcare professionals
Healthcare Hospitality Manufacturing
Focus• Large hotel owners
and managers (>20)• Gaming and tribal
properties• Issues such as
legionella exposures, bed bugs, food borne illness and guest properties
• CAT exposed properties
Highlights• Leading broker in the
hospitality industry• Design programs with
proprietary software, RiskConcierge, to reduce total cost of risk
• Proud partner of the American Hotel & Lodging Association, having prepared their annual loss cost study for the past 18 years
Focus• Strong focus on
automotive companies, warehousing facilities, distribution and food related companies
Highlights• Utilize ZOOM® to drive
down workers’ compensation costs
• Create crisis communications plan with recover options to reduce business interruption from product recalls
Focus• Hedge funds,
investment advisors, community banks, transfer agents and insurance companies
Highlights• Proven algorithms
analyze thousands of data points to determine the likelihood and severity of incurring litigation
• Design programs to protect boards and investors in a regulatory investigation
• Review cyber risk to ensure a long-term, stable program
Financial Services
Focus• Specialize in single
parent and association captives as well as risk pools and Risk Retention Groups (RRG)
• Develop alternative risk finance solutions that solve insurance needs and generate profits in a tax efficient manner
Highlights• Manage >100
captives across 10 major domiciles ranking us 3rd largest captive manager in the world
• Only captive manager to invest in specific audit policies and procedures
• Team includes on-staff actuaries, CPAs, MSAs, JDs and software specialists
Beecher Carlson Specializations
Focus• Public or large private
companies with an employees base of 2,500 or higher
• Fortune 1000, now expanding to 2000
Highlights• Provide objective, data-
driven knowledge in order to mitigate severity and frequency
• Utilize MARA, our proprietary set of modeling applications, to evaluate risk drivers along 4,000 data points
• Five lawyers on staff to support claims advocacy
Executive Liability
Focus• Specialize in soft
occupancy companies with large CAT exposures (wind, flood and earthquake)
Highlights• Evaluate programs for
gaps in structure, terms and conditions
• Superior analytics bolstered by fast, accurate modeling (45 minutes versus competitors 2 week turnaround)
• Proprietary LiNK technology creates customized match of premium to actual exposure
Property Captive Management
Focus• Large semiconductor
and capital equipment manufacturers
• Hardware and software technology companies
• Networking, Social Media, Internet Services, Bitcoin
• Cloud, SAAS, and Internet Security Companies.
• Medical Device, Biotechnology, Pharmaceutical
Highlights• Ability to handles large
multinational programs in multiple countries
• Handles selective technology start-ups
• Ability to handle global clinical trials
Technology/Life Sciences
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Why Direct?
How We Access the Marketplace
Domestic Marketplace
Excess & Surplus Lloyds of London /
European Markets Bermuda Markets
Beecher Carlson
Domestic WholesaleBroker London Broker Bermuda Broker
• Facilitates the insured’s ability to interface with their underwriters.• Direct negotiations with underwriters maintains control over what message is being delivered to the markets.• Reduced frictional costs. Wholesale brokers should only be utilized for those markets retail brokers cannot
approach on a direct basis. We have access points at the highest levels of all major carriers.
MARA | Multivariate Algorithm for Risk Analysis (MARA) evaluates approximately 4,000 metrics to determine and assess your company’s risk drivers
passion. innovation. accountability.
Casualty Capabilities>
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Beecher Carlson Casualty Practice• The largest segment within Beecher Carlson
• Approximately 85 staff members in the four major hubs:– Atlanta, New York, Woodland Hills, Nashville
• Nearly 40% of our Casualty staff is dedicated to claims, risk control and analytics because nearly 90% of your cost is based on your retained losses– Our competitors: average 7-9% in claims and analytics staff compared to the
Casualty staff
• Manage more than 85 national accounts
• Our staff includes senior industry pros supported by depth at all levels
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You Are The Largest Insurer on Your Risk
P R E M I U M
S E RV I C E
U N I N S U R E D
LO S S E S
“You should think like an insurer….we will inform you and provide you with the tools to do just that.”
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LO S S E S
Casualty Analytics
ACTIONABLE ANALYTICS
The analysis we perform allows us and YOU to identify the key areas to attack to reduce the cost of the largest percentage of losses you retain.
CLAIMS MANAGEMENTOur analytics enable us to identify the most potentially costly claims, the best/worst adjusting performances and the most efficient means to close claims economically to obtain the lowest possible cost.
OPERATIONAL ENHANCEMENTS
We look at the where, how and why drivers of your claims and establish a joint task force to make changes to how your people and operations do their jobs in a way that prevents accidents from happening at all.
“We empower our clients to make educated buying decisions about their risk financing and how to attack and reduce their claim costs.”
CLAIM MANAGEMENT & RISK CONTROL• ZOOM®/Enhanced Claim Management• Operational Assessment• Data Integrity• Claims Administrator Management• Claim Audit/Best Practice• Safety Program Evaluation
LOSS ANALYSIS• Loss Projections• Retention Analysis• Monte Carlo Simulations• Collateral Analysis• Loss Emergence Schedule• Scorecards – Measure KPIs
EDUCATED DECISION MAKING TOOLS
• Net Present Value Analysis• Cost of Capital Analysis• Retrospective Adjustment Simulations
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Client Results
Rolling 12 Month New Client Results...Account Wins From Other Major Brokers or Direct Writers:
AVERAGE RATE
REDUCTION
15% Market average was 4% rate increase over same period
COLLATERAL IMPACT
12.5% Average reduction on go-forward collateral amount
31% Average reduction on existing
collateral amount
MARA | Multivariate Algorithm for Risk Analysis (MARA) evaluates approximately 4,000 metrics to determine and assess your company’s risk drivers
passion. innovation. accountability.
ZOOM®>
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TCOR100%
Beecher Carlson FocusTraditional Broker Focus
INSURANCE CHARGE
7.1%
Total Cost of Risk
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Better Results: Provided by Beecher Carlson
BEECHER’S
ZOOM® PROCESS
GETS BETTER RESULTS
• 14% Average Reduction on Projected Ultimate Incurred • 29% Average Reduction on Reserve Liabilities• 31% Average Reduction on existing collateral • We have mitigated our client claim cost by $215,041,280
in the last two years• Insurers will accelerate a reduction in collateral for ZOOM®
clients • Insurers will lower deductible / excess workers compensation
premiums on ZOOM® clients • With ZOOM® analytics, we present a stronger marketing
submission
19
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What is the ZOOM® Process?
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PROCESS SOLUTIONS
JOINT STEERING COMMITTEE AND STEWARDSHIP /
ACCOUNTABILITY
STRATEGIC CLAIM FILE MANAGEMENT
HISTORICAL CLAIMS
CURRENT CLAIMS
PROSPECTIVE CLAIMS
CLAIMS / PREDICTIVE MODELS
CAUSE & EFFECT / ROOT CAUSE
SCORECARDS & GOAL TRACKING
SOLU
TIO
NSO
LUTI
ON
SOLU
TIO
N
ZOOM® SYSTEMATICALLY PINPOINTING “CRITICAL FEW” OPPORTUNITIES FOR IMPROVEMENT
LOSS DATA ANALYTIC TOOLS SOLUTIONS
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ZOOM® Analytics - Baseline Assessment
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• Data Run by 32 Key WC Performance Indicators (KPI’s)
• Establish Baseline Outcomes
• Provide Suggested Goals and Objectives by Policy Year
Program Period PY14(1/1/14 - 1/1/15)
valued as of
Program Period PY13(1/1/13 - 1/1/14)
valued as of
Program Period PY12(1/1/12 - 1/1/13)
valued as of
KPI's7/31/14
(7 Months)7/31/13
(7 Months)7/31/12
(7 Months)PY14 vs PY13 PY14 vs PY12
Ultimate Incurred $9,600,000 $7,633,000 $9,070,000 26% 6%1. Total claim frequency 257 276 270 -7% -5%2. Total incurred $2,579,193 $1,638,613 $1,110,304 57% 132%3. Total paid $775,172 $641,729 $475,017 21% 63%4. Average incurred $10,036 $5,937 $4,112 69% 144%5. Average paid $3,016 $2,325 $1,759 30% 71%6. Closed claims 199 207 220 -4% -10%7. All claims closing percentage 77% 75% 81%8. Indemnity claims 56 45 28 24% 100%9. Indemnity claims percentage 22% 16% 10%10. Average incurred indemnity $40,119 $25,705 $24,125 56% 66%11. Average paid indemnity $10,437 $7,590 $7,834 38% 33%12. Indemnity closed claims 17 7 5 143% 240%13. Indemnity closing percentage 30% 16% 18%14. Open indemnity claims 39 38 23 3% 70%15 Top 10 claims incurred $1,637,252 $570,206 $453,734 187% 261%16. Top 10 as % of total incurred 63% 35% 41% 82% 55%17. Medical Only claims 201 231 242 -13% -17%18. Total paid Medical Only $190,698 $300,195 $255,674 -36% -25%19. Average incurred Medical Only $1,654 $2,086 $1,797 -21% -8%20. Average paid Medical Only $949 $1,300 $1,057 -27% -10%21. Med Only closed claims 182 200 215 -9% -15%22. Med Only closing rate 91% 87% 89%23. Payroll per $100 $3,400,000 $3,400,000 $3,482,763 0% -2%24. Incurred per $100/payroll $0.76 $0.48 $0.32 57% 138%25. Employee Count (Avg) 0 0 0 - -26. Incurred per EE Count - - - - -27. Frequency rate per 100 FTE's - - - - -28. Unit Count (Avg) 0 0 0 - -29. Incurred per Unit Count - - - - -30. Claims with lost work days - -31. Lost Work Days - -32. Average Lost Work Days - -
Initial Scorecard Baseline AssessmentKnowing precisely where and howto focus to lower your cost of risk
2014: Goal – 6.5% improvement to the average cost per claim (ACPC) when compared to 2013 at 18 months (no adjustment for inflation or salary increases)– $700k reduction - undeveloped – 28% indemnity percentage
2013: Goal – 6.5% reduction to the existing 9% increase in the average cost per claim trend in 2012– no adjustment for inflation or salary increases– $900k reduction - undeveloped
2012 and older: 621 claims – target reduction: $2.4M reduction (excluded excess claims)
Aggregate Incurred Reduction Target: $4M (approx.)
Current Claims
Prospective Claims
HistoricalClaims
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ZOOM® Analytics - Cause and Effect
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• Conduct “deep dive” analysis to pinpoint causation or root cause of any adverse outcomes
– Litigation Cost / Duration – Medical Cost / Duration
– Indemnity CAT Scan
– Adjuster Performance
• Measure KPIs of the critical processes that drive or contain 80% of the outcomes and establish goals for improvement
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ZOOM® Timeline
23
MARA | Multivariate Algorithm for Risk Analysis (MARA) evaluates approximately 4,000 metrics to determine and assess your company’s risk drivers
passion. innovation. accountability.
Property Capabilities>
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We challenge every aspect of your program to build market momentum through an integrated team approach.
Broking Style
• Pre-Underwrite Each Risk– Analyze the Total Insurable Values (TIV)– Determine the MFL and PML estimates for “critical” exposures– Review the historical loss records– Examine available engineering/loss control reports– BI values and geo-radius tool
• Advantages Gained from Pre-Underwriting – Determine the appropriate amount of “critical” limits to purchase– Proper layer breakpoints– Layering structure (i.e. quota share or “stacked” layers)– Potential roadblocks are identified to help better position your company– Identify and reach target markets– Identify target pricing
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Our Technology and Risk Modeling Solutions
• Claims• Loss control• RMS – Catastrophe modeling• Mapping capabilities• Radius Tool• Google Earth Pro – “Not your desktop Google Earth”• Premium allocation• LiNK - Proprietary rating tool
MARA | Multivariate Algorithm for Risk Analysis (MARA) evaluates approximately 4,000 metrics to determine and assess your company’s risk drivers
passion. innovation. accountability.
Executive Liability Capabilities>
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Executive Liability Overview
ELP
The Executive Liability Practice (“ELP”) is a Beecher Carlson specialty practice made up of experienced and knowledgeable advisors/brokers solely dedicated to providing our clients with the advice needed to properly protect corporations and their directors and officers against unforeseen liability that arises from everyday corporate activities.
Products
• Directors & Officers Liability
• Fiduciary Liability
• Employment Practices Liability
• Professional Liability
• Cyber Liability • Crime Insurance• Kidnap/Ransom
& Extortion Insurance
New York
Atlanta Bermuda
San Francisco
• Industry Expertise (Healthcare, FI, Oil & Gas, Private Equity, Life Sciences, Retail, Distressed Co’s, Hospitality, etc.)
• Focused Resources – have 18 dedicated resources in D&O & Executive Liability Insurance products
• Legal Leverage – 5 person Dedicated Claims Staff (all attorneys)
Boston
ELPKey Drivers ELPFootprint
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Executive Liabi l i ty Cl ient Results
PERFORMING FOR OUR CLIENTS
SETTLED LARGEST
ADA CLAIM
$20M
PLACED LARGEST CYBER PROGRAM LIMITS
$500M
3RD
PLACED TRANSACTION POLICY FOR THE 3RD LARGEST MERGER & ACQUISITION DEAL
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Forward-Looking AnalyticsDirectors & Officers Liability Analytics Output
MARAEstimates the likelihood that the firm will have an SCA claim filed against it in the next 12 months and places it into a risk quartile based on this estimate
Assumes that the firm will have an SCA claim filed against it in the next 12 months and places it into a risk quartile based on the likelihood that this claim will be dismissed
Assumes that the firm will have an SCA claim filed & settled against it in the next 12 months and estimates potential settlements amount at various confidence levels
Underwriting
Benchmarking KnowledgeBecause we analyze approximately 4,000 data points — several times more than any other brokerage —you will know more about your risks than ever before and can compare and contrast your results with those of your peers. Using inputs from broad data sources, we provide an objective risk assessment score relative to comparable organizations and an estimation of the likelihood and severity of future securities class action, which forms the basis for adjusting both insurance limits and retentions.
Our analytical insight is highly persuasive, objectively demonstrating to carriers the facts supporting your unique risk profile. Knowledge of specific positive or negative risk factors means no surprises for senior management at underwriter meetings. And, it provides powerful intelligence to facilitate underwriter negotiations to ensure you the best terms, conditions and pricing.
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– We represent your interests before the carriers– Our clients come to see us as an extension of their risk
management function– We have more high-profile, complex experience than any
other broker – We evaluate claims history to spot loss trends and offer
guidance on reducing your exposure to future claims– We use our experience handling your claims to look at
opportunities to enhance coverage going forward.– We furnish our clients with timely, relevant content that
impacts their Executive Liability programs.
Claims Advocacy
When the worst happens in the boardroom, you need the expertise and experience of the industry’s most robust and well respected Claims Advocacy team. Beecher Carlson’s claims advocacy group has an emphasis on advocacy, not just claims management. Our claims advocates work with you, advising you on how to best mitigate trouble, rather than only stepping in after litigation is filed.
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Claims Management Process
Blocking and Tackling Managing Expenses
Negotiating with Insurers Risk Prevention, Mitigation and Education
• Initial reporting of claims• Analyzing reservation of rights• Analyzing correspondence that evidence their view of
coverage• Consulting with you as to the most appropriate form of
response• Drafting response letters for your review and approval• Gaining insurer approval of defense counsel & other
supporting experts you may choose to engage in the defense of claims
• Monitoring the claim activity until it matures into a resolution phase
• Closely track and monitor insurer payments for you• Ensure that payments in accordance with the terms of the
policy are made timely and accurately• Handle all defense expense issues with the insurers
eliminating unnecessary distraction and allowing you and your counsel to exclusively focus on defending counsel rates
• Compliance with litigation guidelines/budgets• Recognition of exhaustion of policy retentions and
appropriateness of deductions by insurers• Challenge insurer positions ensuring that you are
optimizing your ability to obtain recoveries under the policy
• We are on your side. In the event of material coverage issues or recalcitrant insurers, our objective is to bring the key decision-makers, both on the claims and underwriting side if necessary, to the table with the intent of supporting you in the resolution of claims. That support is usually, but not always, in the form of financial contributions; however, it is always our goal to have someone from the insurer with financial signing abilities available in the event of settlement discussions including mediation or arbitration proceedings.
• We are prolific in the number of white papers we produce on recent case decisions of impact for our clients including changes in legal and regulatory requirements and claims trends. We can research issues for you and produce a position paper on a subject of concern or interest to you. One of our fundamental tenets is that an ounce of prevention is worth a pound of cure and so our mission is to reduce your dependence on the commercial insurance market in any area where you can produce greater results for your company, employees and shareholders by preventing a shock loss in the first place. Insurance, in our view, is no panacea for the reputational and other damage that ensues in the event of a major corporate governance and financial scandal.
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Claims Advocacy and Consulting
Risk Prevention, Mitigation & Education
Blocking and Tackling
Managing Expenses
NegotiatingClaims
Advocacy
Claims reporting oversight
and assistance
Coverage response and
advocacy
Advocacy on specific claim
issues and strategies
Claims renewal
oversight and
assistance
Review billing terms
and conditions
BEYOND JUST CLAIMS REPORTING
MARA | Multivariate Algorithm for Risk Analysis (MARA) evaluates approximately 4,000 metrics to determine and assess your company’s risk drivers
passion. innovation. accountability.
Cyber Liability Capabilities>
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CyberSelect™Data breaches have become more and more prevalent. Given the press surrounding the size of such instances (the number of files breached and people affected), companies have begun to realize the resulting costs can be staggering. Companies should not have to worry about whether their policy fully or partially responds, it should be comprehensive, complete and not riddled with sub-limits.
Beecher Carlson has a proprietary Cyber Liability and Data Breach Response policy – CyberSelect™. The policy is designed to offer the most comprehensive coverage available in the market and offers many enhancements not typically available, such as:
• Eliminates the need to gain consent from the Insurer to hire legal experts, forensic accountants and public relations consultants allowing a rapid response to a data breach
• Provides full policy limits for costs arising out of any regulatory investigation by any regulatory authority or the Payment Card Industry Security Standards Council including card company fines, penalties and assessments, as well as credit card reissuance costs
• Includes Business Interruption and Extra Expense at full policy limits and extends coverage for “contingent” business interruption and extra expense to the insured as a result of acts of third party vendors
• Includes Media Liability coverage for all publications, including false advertising through electronic or written means
• The ability to add professional liability to the coverage• Primary limits available up to $50 million
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Understanding Cyber and Tech Exposure
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000,
000
2,50
0,00
03,
000,
000
3,50
0,00
04,
000,
000
4,50
0,00
05,
000,
000
5,50
0,00
06,
000,
000
6,50
0,00
07,
000,
000
7,50
0,00
08,
000,
000
8,50
0,00
09,
000,
000
9,50
0,00
010
,000
,000
10,5
00,0
00
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
Number of Notices
Cost
Per
Rec
ord
Risk Assessment: identifying and prioritizing technology, cyber and E&O risk
Privacy Risk Modeling: customized data breach impact-analysis of severity and frequency for breach of confidential information
Gap Analysis: identifying the gaps and overlaps in relevant programs and making recommendations
Business Impact Analysis: with Procor, providing pre-risk revenue impact assessment and post-breach response and audit services
ePHI Notification Cost Per Record
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Beecher Cyber Analytics ReportBeecher Carlson’s Cyber Analytics modeling takes into account the industry, the type of information lost/breached and can also take into account the breadth of coverage under the cyber insurance policies purchased to estimate probable maximum loss scenarios. Information provided by the model includes:
• Probable maximum loss: provides an estimated maximum cost of a PII breach based on the number and types of records held by the company
• Breach Estimates: provides estimates of the size and resulting expense of a breach based upon a “1 in 200 company” breach event (note: this can be reset at other levels at the Insured’s discretion)
• Information for contract negotiations: provides a tool to help Insureds negotiate liquidated damages, indemnity and insurance provisions with vendor contracts
• Risk Register: a top cyber and tech risks as developed by Beecher with Northwestern in a workshop or question format
The analytics report can be expanded to include:
• Vendor Management Tools: example language and guidance on requesting Cyber and E&O insurance from third parties technology and related service providers
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Beecher Carlson Online Breach Cost Tool
Cost Per RecordCost of a Breach
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Consequences of a Data Breach• Directors, officers and employees are subject to termination• Costs to comply with notification to consumers/employees, credit monitoring costs,
cost of restoring Data / Public Relations– Privacy response cost: $5 -$25+ per individual (Our estimates are lower than the
research estimates)• Civil penalties and fines• Class Action suits• Individual civil actions• Legal and defense costs:
– Civil, regulatory and possibly criminal defense– Data Privacy counsel can cost $700 per hour. A major data breach will cost
millions in legal costs• Business Interruption Costs• Corruption or destruction of data• Theft of funds or property• Extortion• Reputation loss
MARA | Multivariate Algorithm for Risk Analysis (MARA) evaluates approximately 4,000 metrics to determine and assess your company’s risk drivers
passion. innovation. accountability.
Mergers and Acquisitions Capabilities>
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National Private Equity/Mergers and Acquisitions Services
1
2
3
4
5
6
7
Purchase agreement evaluation
Loss history analysis
Actuarial valuation of self-insured obligations
Historic insurer solvency analysis captive subsidiary audit
Analysis of coverage terms and conditions
Competitiveness of pricing and go-forward estimates
Portability of program
Pre-Closing DiligencePre-closing diligence services: • Financially oriented diligence product• Focus on the expense and efficacy of
the insurance program currently in place.
In terms of Property & Casualty and Employee Benefits, this offering includes,
but is not limited to, the following:
• Specialize in: pre-closing insurance, employee benefits solutions, aggregated insurance platforms and transactional risk solutions
• Large and middle market private equity firms, infrastructure funds, alternative asset managers and corporate clients
• Averaging more than 13 years of experience
• Worked on over 5,000 transactions
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Procurement Strategies
Port
co A
Port
co B
Port
co C
Partially Shared• Single, centralized trading platform
based in New York– Trade directly with New York underwriters
for increased marketplace leverage
• Myriad of approaches, – Fully integrated and shared, partially shared
or standalone programs
• Post-close placement results in:– Enhanced terms and conditions– Maximized cost savings for Portfolio
Company and Private Equity Sponsor
• Transactional Risk Solutions for issues related to:– Indemnification length, breadth, scope– Assumed and/or operational environmental
liability– Specific contingent liability solutions
MARA | Multivariate Algorithm for Risk Analysis (MARA) evaluates approximately 4,000 metrics to determine and assess your company’s risk drivers
passion. innovation. accountability.
Captive Capabilities>
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Captive Management StatsACTIVE IN 10 DOMICILES 3rd LARGEST
CAPTIVE MANAGER IN THE WORLD
2013 INNOVATION IN CAPTIVE MANAGEMENT AWARD
OVER 100CAPTIVES
2015 & 2012 CAPTIVE MANAGER OF THE YEAR
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Captive Services
Three Phase Approach
1 Feasibility Study – Examine your current program and historical loss experience to outline specific components to operate an alternative program and assess potential cost savings and operational advantages.
2Plan Design and Options – Design the most optimum alternative program for your business including actuarial loss projections, business plans, financial projections, application and licensing, fronting and reinsurance design and placement as well as claim handling design and placement.
3 Program Management – Combine our insurance knowledge, innovative problem-solving capabilities and exceptional experience in sophisticated program management to integrate your program on schedule and within your budget.
MARA | Multivariate Algorithm for Risk Analysis (MARA) evaluates approximately 4,000 metrics to determine and assess your company’s risk drivers
passion. innovation. accountability.
Environmental Capabilities>
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Environmental Services
• Specialization in environmental risks• Deep understanding of environmental risks• Provide in-depth environmental risk
reviews– Risk exposure– Risk prioritization– Risk quantification– Risk mapping– Coverage review
MARA | Multivariate Algorithm for Risk Analysis (MARA) evaluates approximately 4,000 metrics to determine and assess your company’s risk drivers
passion. innovation. accountability.
International Capabilities>
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Our International Practice• Experienced International Practice with extensive Insured and Brokerage
backgrounds provides global coordination
• Currently servicing large multi-national clients and managing placements in more than 100 countries
• International consulting (assessment):– Insurance regulations and practices worldwide– Local exposures and policy placement requirements– Local broker representation where required and/or warranted depending on
local regulations, number of local policies, complexity of local coverage and claims involvement
• Member of Worldwide Broker Network (WBN)
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International Assessment
What is driving the need to addressthe issue?
What is the exposure to client if a policy is not procured?
Are there local regulatory/compulsory requirements driving the need for purchase?
What insurance solutions are available?
Reasons Why Insureds Buy Local Policies:• Premium and Tax Requirements
– Does premium have to be collected locally?– Transparency in how and where premium is collected.– Are taxes applicable?
– Will the local government assess any penalties and/or fines if a local policy is not purchased?
– Is centralized or decentralized risk management philosophy followed?– Presence of local leadership? Is a local Executive requesting a local
policy?– Does the government or local contract require an insurance policy be
placed locally?• Is non-admitted insurance accepted?– Can the global policy service and make a payment locally if there is a
claim?– I.E. If the master global policy cannot make a claim payment
locally and the parent company reimburses the local subsidiary, does the parent company risk tax and penalty liability where it is domiciled?
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Worldwide Broker Network (WBN)World’s largest fully integrated network of independent Property and Casualty and Employee Benefits Brokers in the world:• In more than 100 countries throughout the world
• Serviced by 15,000 professionals
• Placing $28 billion in premiums in the global insurance market
WBN is a collaborative network, independently owned:• Over 20 years of WBN Member-to-Member loyalty and responsiveness
• Mandatory service standards within the network
• 360 Degree Peer Review of WBN Members
• Client objectives clearly communicated and executed at all worldwide locations
• Market and arrange all classes of insurance coverage
• Provide risk management consulting services
• Highest level of service to all clients of any size, industry or location
• Technology enabled global management and delivery system customized for our clients
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Value of an Independent Network
You have direct Access to the Owners and Senior Management of our WBN Partners
Expense structure allows your company and the WBN to match our income to the level of service delivered locally
Incoming business both large and small treated the same: with HIGH priority
Powerful web-based collaboration system with no additional technology license fees
Detailed International Service Instructions are developed and deployed to meet client needs
Your company’s relationships at Senior levels improves the quality and consistency of local service
Owned networks often carry minimum fees per country that inflates broker’s compensation
Owned networks place higher priority on indigenous income producing business
Data and information services are often offered subject to additional user fees
Standard service levels established corporately with little local flexibility allowed
Client Benefits vs Owned Network Approach
Flexible Network structure allows you to work within or outside of the WBN network to match your needs
Owned networks often require clients to work exclusively within their network structure
Why companies value an independent Network?
WBN firms have low management and employee turnover due to corporate and network structure
Consistent level of client service on both a local and global basis
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Global and Local Policy Management
(Parent Company)
Foreign Subs Foreign Subs Foreign Subs
Insurance Carrier
Local Insurance Carrier Local Insurance Carrier Local Insurance Carrier
Beecher Carlson places Master DIC/DIL Policy
Beecher Carlson Coordinates locally admitted coverage with International Partner Network (WBN).