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State of Louisiana Office of Risk Management

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Presentation on theme: "State of Louisiana Office of Risk Management"— Presentation transcript:

1 State of Louisiana Office of Risk Management
Property Consultant RFP UW-03

2 Pre-Proposal Conference Monday, July 25, 2011 Agenda
Please sign-in on the attendance sheet! Overview of ORM Property and Insurance Information Review of RFP Question & Answer

3 ORM Overview Governed by LA R.S. 39:1527 et seq Self-insurance program
Excess re-insurance purchased Maintains inventory of all state-owned buildings and values of contents 9,200 insured buildings - $16 Billion TIV FEMA Stafford Act Requirements

4 Property Program History
Prior Katrina/Rita (2005): $25M SIR / $475,000,000 XS Limit / $6,950,000 Annual Premium After Katrina/Rita ( ): $50M SIR / $150,000,000 XS Limit / $35,485,000 Annual Premium After Gustav/Ike (2009+): $50M SIR / $150,000,000 Limits / $28,450,000 Annual premium Summary of Property Coverage (on website) 2007 & 2008 – wholesale broker was able to increase excess limits to $300,000,000 and $350,000,000 (above the SIR) respectively in these years.

5 Challenges Reduction in market capacity for coastal risks
Following form exceptions High SIR Flood Insurance Premium increases passed to insured agencies High TIV in high-risk areas Limitations of the Procurement Code #1 #2 ORM uses standard ISO forms and creates endorsements to change specific items, usually to broaden coverage rather than restrict it. Business interruption and extra expense issues, mold exclusions, fine art coverage at agreed values, etc. #3 Currently $50M (flood, wind and earthquake) with a sublimit of $25M AOP. #4 Currently, approx. 1,000 individual NFIP policies at a premium of $4.5M. Administratively burdensome. The S/I provides flood coverage for the remainder with no excess coverage. We would like to get flood coverage back into the excess and move away from NFIP. Tried to bid flood excess separately, but market wouldn’t bear it. We couldn’t get a separate set of limits for it. #5 Dramatic premium increases have affected the budgets of all insured agencies, especially affecting the small boards and commissions that have relatively small property values and budgets. #6 Concentration of property in New Orleans and Baton Rouge. High-valued structures: Superdome and New Orleans Arena, Charity Hospital (new University medical Center), LSU campus (450+ buildings) #7 Currently, we use the Invitation for Bid process as established by the Office of State Purchasing, which governs the purchase of commodities of which “insurance” is included. The bid process actually limits competition rather than enhancing it. We have received one quotation for the last several bid years.

6 Review of RFP Written Inquiries Deadline: August 1, 2011 4:00 pm CST
Proposal Submission Deadline: August 17, :00 pm CST Anticipated Contract Date: September 7, 2011

7 Supporting Documentation
Located at Schedule of Property Values Summary of Property Coverage by Fiscal Year ORM Statute Procurement Code Statutes

8 Q & A Company financial statements are private. Is there an alternative to submission or a way to protect them from public access? What are the primary reasons ORM is performing this study? Catastrophe modeling reports are very costly and require large amounts of data. Has ORM had these reports in the past and are we aware of the cost and data required? Will the Consultant be involved in the selection and placement of 2012 insurance program? What are the goals of the RFP?

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