1. Proprietary Property of GE - Not to be Distributed Externally Underwriting Study: What Account Characteristics Drive the Loss Ratio Presented by Lawrence LaBelle, CPCU May 20, 2003 10:45 AM to 12:00 PM

2. e 1 Loss Prevention Study Why Data Collection Assist in Selection of Accounts Score the Quality of an Account Prioritize Loss Control Recommendations Customize Loss Control Training Plans Goals Development of Selection Criteria Identify Positive Account Characteristics Identify Customer Loss Control Needs Improve Customer Retention Data Parameters Coregis Accounts 7-01-2000 to 7-01-2002 Municipalities, Schools, Special Districts Property, Auto, CGL, LEL, POL, ELL Accounts With Premium > $10,000 We Were Looking For The Best Practices Collection Process Interviews by Coregis Consultants Risk Managers and Department Heads Customized Survey for Each Account Scored As Policy in Place or Not in Place

3. e 2 Looked at 5 Years of Coregis Loss Data Determined Loss Drivers for 90% of Claims Work Out TM Included Claims, Underwriting and Loss Control Developed 80 Potential Processes That Could Reduce/Prevent Losses Standardized Collection Interview Process Data Analysis

4. e 3 Top Loss Drivers What Do You Think We Found?

5. e 4 Loss Drivers Automobile Speed Backing Inattentive Drivers Turning Property Arson Electrical Fire Wind CGL Slip and Fall Road Maintenance Thrown Objects POL/ELL Employment Failure to Protect Zoning Law Enforcement False Arrest Civil Rights Jail Suicide

6. e 5 The Interview Did the Essential Process Exist? How Was the Process Documented (or Was It)? Are the Process Details Written? Who Is Responsible for the Process? Are There Controls in Place with Follow Up? Was There On-Going Process Training? Physical Review Done on Select Processes Looked for Established Processes with Owners

7. e 6 Examples of Essential Processes General Processes Designated Person Responsible and Accountable for Risk Management Active Safety Review Process Business Continuity Plan in Place Catastrophe Plan in Place Property Processes Active Participation in WeTip Security and Inspection Process for Vacant and Unoccupied Buildings Arson Awareness Training Storage of Flammable Materials and Chemicals Fire Department Inspection Report Review Process With Action Plans Building Self Inspection Program Computer Lab Electrical System Review Process Building Maintenance Program With Adequate Budget Roof Snow Removal Process

8. e 7 Auto Processes MVR Analysis Process for All Drivers Driver Training Program Substance Abuse Program With Testing Driver Disciplinary Program Vehicle Use Policy Fleet Maintenance Program With Adequate Budget Pre and Post Trip Inspection Policy Examples of Essential Processes POL/ELL Policies Pre Employment Screening With Background Checks Employment Hiring Policies Sexual Harassment Policy With Training for Management and Staff Updated HR Policy and Procedure Manuals Training Plan for Newly Elected or Appointed Officials Employment Practices Help-Line Process

9. e 8 General Liability Processes Roadways Surfaces and Traffic Control Self Inspection Process Road Maintenance and Signage Record Keeping & Follow-Up Process Roadway Vegetation Control Process With Documentation Security / Hallway Monitor Policy Playground Design and Maintenance Process Walkway Self Inspection Program With Documentation Process Sexual Harassment Awareness Training for Students Workplace Violence Program Examples of Essential Processes

10. e 9 Law Enforcement Policies CALEA Accreditation Office Training Policy With Appropriate Expenditure Allotment Use of Force Policy With Supervisor Controls Law Enforcement Policy and Procedure Manual in Place and Updated Process for Monitoring Compliance With Policy and Procedures Prisoner Transportation Policy Arrest Procedures Policy With Training and Monitoring Jail Suicide Prevention Procedure Inmate Account Procedures Jail Policy and Procedure Manual in Place and Updated Examples of Essential Processes

11. e 10 Property

12. e 11 Auto Results

13. e 12 Law Enforcement Results

14. e 13 General Liability

15. e 14 Conclusions Account Scores Were Useful by Line of Business We Are Able to Identify Best Practices Awareness Training on Policies and Procedures Improves Results Enforcement and Control Processes Improve Results Accountable Risk Manager Improved Results Accountability, Awareness and Training Make the Difference

16. e 15 Discussion Questions