TIPI ACTIVITY SNAPSHOT

TIPI SUBMISSION ACTIVITY (JAN 1 – NOV 27, 2017) BAND ASSET SUBMISSIONS PREMIUMS QUOTED Bound 40 $6,339,996 Quoted Not Bound 10 $1,861,934 Total 50 $8,201,930 ATC SUBMISSIONS 16 $681,872 $0

PREMIUM ACTIVITY B&M Property Excess Property

PREMIUM ACTIVITY COC & Wrap Up under Band Program COC & Wrap Up – Stand-alone

PREMIUM ACTIVTY

SUBMISSION COUNT BY GEOGRAPHICAL AREA

COMMUNITY PROGRAM STRUCTURES – OUR MARKETS Lines of Coverage Limits ($) Insurer Primary Property $20,000,000 Allied World Assurance Company $5,000,000 Certain underwriters at Lloyds of London Excess Property $15,000,000 xs $5,000,000 $30,000,000 xs $20,000,000 Berkshire Hathaway Boiler and Machinery $10,000,000 Aviva as represented by Risk Central Crime $100,000, $250,000, $500,000 Chubb Insurance Commercial General Liability Excess Liability $5,000,000, $10,000,000 Environmental Impairment Liability $2,000,000 Automobile Umbrella Liability $5,000,000; $10,000,000; $15,000,000 Directors and Officers $5,000,000 (max limit) Trinity Underwriting Accidental Death and Dismemberment $200,000 Chubb Life Insurance

HOW INSURANCE PREMIUMS ARE CALCULATED

No one likes paying insurance premiums, but insurance is a necessity.

UNDERWRITING CRITERIA Insurance companies, like any other business, need to make a profit to stay in business. They use historical data to determine the chance of losses and charge premiums to cover them, factoring in a profit for the company. They use a set list of underwriting criteria including, evaluating the type of construction materials or building practices used, community safety and security, fire protection, condition of property, and whether any risks or hazards are present, to determine whether they’re prepared to insure a given community.

PROPERTY EXPOSURE THE FUS Most licensed insurance companies in Canada require insurable property to be located in an area with a Fire Underwriters Survey (FUS) rating. FUS is the main premium rating used by insurance companies to determine premiums and/or if a property is insurable. Homes without access to adequate Fire Department protection (“Unprotected”) will always sustain more damage than those with access to quality fire response (“Protected”).

PROPERTY EXPOSURES – THE FUS The FUS sets a fire grade to help insurers provide a rate on a particular property or geographical area. Commercial fire grades are determined on a scale of 1–3: FUS Category 1: Protected – the best grade, resulting in the lowest insurance premium FUS Category 2: Semi-protected – mid-range, resulting in an average insurance premium FUS Category 3: Unprotected – highest range, resulting in the highest insurance premium

UNDERWRITER’S PERSPECTIVE – PROPERTY Geographic Location Fire Protection Located in a flood or earthquake zone? Prone to tornados or large wind storms? History of forest fires in area? Is there a fire station in the community? Reliable source of water for firefighting? Operational fire truck? Minimum of 1 full time firefighter on duty back by a minimum of 15 firefighters? Do they have a reciprocal agreement with a municipality or city within 10 km? Vacant Buildings Photos of the community, especially if this is a new submission, helps the underwriter get a good look at what they are being asked to insure.

UNDERWRITER’S PERSPECTIVE - CRIME Incoming cheques stamped “deposit only”? Counter signature required? Does the person who reconciles the bank accounts also sign cheques? Does the person who reconciles the bank accounts also handle deposits? Are there large quantities of money and security on the premises at any one time? Is there a safe/vault?

UNDERWRITER’S PERSPECTIVE - LIABILITY All legal entities should be noted on the application and advised if your are requesting to be included under the CGL or excluded (insured elsewhere). Revenues need to be noted for the operations and brief description of operations for each entity that is requested to include. Joint ventures are excluded unless the insured has controlling interest and is responsible for the operations subject to underwriter approval. Certain operations are excluded such as commercial logging, commercial fishing, mining, oil & gas, commercial manufacturing, airports. Are sub-contractors required to carry general liability insurance and does the insured request evidence of insurance? Are written protocols in place for hiring practices, whether or not criminal record checks, child welfare checks are done on employees, and abuse protocols?

LIABILITY Sports and recreational facilities Citizen and leisure service centres Life safety and protection Public works Emergency medical services Community development corporation Housing corporation Leased/owned commercial buildings Water treatment and distribution Wastewater treatment Solid waste disposal Volunteers, board, chief and council Food banks Long-term care facilities Public housing Building plan examination/inspection

TYPES OF COUNCIL-OWNED BUSINESSES Forestry, Mining, Aquaculture, Farming, Gaming, Real Estate, Oil and Gas, Construction, Aviation, Marine, Fleet Automobile

UNDERWRITER’S PERSPECTIVE ON LOSSES Are there frequency issues? What is the cause of loss? What measures has the insured put into place to prevent further losses? Is arson an issue? Have there been any flood, wind and/or hail losses, crime, break and enter, wrongful dismissal losses?

Underwriters use a simple loss ratio (losses divided by premiums) to gauge suitability for coverage. A high loss ratio (the amount of loss meets or exceeds the premium) is considered bad and a risk.

LOSS RATIO Few underwriters will accept risk without requiring a very large deductible or self-insured retention. Unless remedial action is taken, the loss frequency will eventually spawn one or more severe claims. Insurers have acceptable loss ratios; loss that’s just short of producing an unprofitable account. Large losses can be avoided if a pattern of small, frequent losses is noticed and the underlying causes are addressed. A combination of financial incentives (or disincentives) and an investigation into the cause of the loss activity, could save the day.

LOSS RATIO Loss history should be divided into ranges showing the total value of losses between $5,000 and $10,000, $10,000 and $20,000, and so on… This reveals acceptable points between the deductible and the insurance. For example, if the loss ratio drops to 70% when the deductible is significantly increased, and drops another 10% when the premium is moderately increased, the underwriter may have found a workable compromise. A limited dividend or return-of-premium plan to reward the client for hitting the formula-driven 60% loss ratio goal may be added.

UNDERWRITER’S PERSPECTIVE – RISK MANAGEMENT What improvements or steps do they take to prevent losses from occurring? Do they notify the fire department when anyone is doing a controlled burn? Are firebreaks created in areas close to forest? Do they have a certified person inspect the wood stoves? Do they ensure all commercial and residential buildings have smoke detectors and do they check them periodically to make sure they work? Do they have security in place in areas that handle large amounts of money? What is the attitude of community leaders towards risk management?

CRIME EXPOSURES – CONTROLLING FIDELITY LOSS Fidelity losses result from: Employee dishonesty Robbery and burglary on insured premises Mysterious disappearance or destruction of money and securities Off-premises hold-up and robbery Acceptance of counterfeit money and money orders Cheque fraud Physical controls include: Alarms Security patrols Cameras Fences Safes or vaults

CRIME EXPOSURES – CONTROLLING FIDELITY LOSS Procedures can be implemented to help reduce crime and improve community liability. Define how to perform particular tasks, to make it difficult for persons to commit crimes or to make it easier to detect crime Implement hiring and training practices that emphasize intolerance and prosecution of dishonesty and crimes Encourage employees to report criminal activities or make suggestions for deterring crime Employee participation in risk management of crime losses is integral.

HIRING PRACTICES Develop concise, written policies on employment matters Conduct training on sexual harassment Follow a carefully documented procedure and exercise special care when handling terminations Carefully document all employment- related actions Conduct thorough, candid annual performance reviews Promptly investigate all allegations of harassment or discrimination Seek the advice of counsel before taking action Screen and do background checks on all paid and volunteer staff with: Position descriptions Written applications Interviews Reference checks Record checks

POTENTIAL DISCOUNTS Exceptional discount Credit Amount Classified protection 10% - 20% on property Housing maintenance program Up to 25% on housing Use of fire alarm monitoring 15% - 30% on property Use of safes and deposit procedures Up to 10% on crime Use of employment manuals Up to 20% on liability Fleet management protocols Up to 25% on fleet automobiles Deductibles increased to $25,000+ 15% on all property No claims discount 10% overall

SUBMISSION INFORMATION REQUIRED FOR QUOTING Prior to visiting the community for the submission information, it is good practice to: Conduct a review of the community on the internet for any concerning news that may create a red flag Review the insureds website if they have one Review the financial statements found on the AANDC website Complete the Band Asset Application Complete all sections. If a section is not required note it as Not Applicable (N/A). Signatures are not required for quoting, however a signed application is required within 15 days of binding

SUBMISSION INFORMATION REQUIRED FOR QUOTING Loss information for the past 5 years Make sure the loss information is up to date. If a claim is past the 2-year limitation it is typically closed and there should be no amounts under reserves. If they had losses, include a brief description of the loss and any work the insured has done to prevent further losses. Example: Residential Fire Loss. What was the cause of the fire? Was it arson? If so was the person(s) caught and charged? Completed Property Statement of Values (SOV) If there are vacant buildings, complete the vacancy questionnaire with an updated photo

SUBMISSION INFORMATION REQUIRED FOR QUOTING Completed Auto Application and Auto Statement of Values including list of current drivers HR Manual Current Financial Statements Photos (not required to quote but is required within 90 days of binding)

REVIEW OF THE FOLLOWING DOCUMENTS: Band Asset Application Property SOV Vacancy Questionnaire Auto & Driver SOV

QUOTING PROCESS AND TIMELINES Initial process time: Review the submission information within 24 hours of receipt Prepare rating sheets Review financials and web. If no questions: it goes into markets for quoting. Review of submission questions: Review, send to markets or contact broker if needing further clarification.  Note: Quoting time average is 1 week with the markets. If there are questions, the broker takes an average 2-5 days to reply back with the answers.

QUOTING PROCESS AND TIMELINES Quotes: Process quotes in Fusion and email to broker Binding Instructions: Broker to advise what lines are to be bound and what have been declined. Binding emails to the markets, prepare policies, invoice. Policies sent to broker within 14 days. Policies from markets: Lloyds, Chubb Life and Trinity issue their own polices. Lloyds issues within 30 days, Chubb Life and Trinity within 20 days.

WHAT AIS DOES DIFFERENTLY

THE CHEAPEST OPTION ISN’T THE BEST OPTION AIS’s comprehensive approach considers a full scope of assets and liabilities with a focus on risk management. We help clients understand the cost and type of coverage they will receive, so there won’t be any surprises later on.

LONG-TERM GROWTH AIS is committed to developing and sustaining strong partnerships with our markets, brokers and communities. We are not looking to simply collect insurance premiums. We strive to ensure we are all working together for the betterment of each other – markets, brokers and insureds. By helping our communities understand their risks and working together to find solutions to these risks is what makes us different from our competitors. For these reasons, we have created: Litigation Risk Management Services Aboriginal Housing Protective Association Aboriginal Emergency Response Services