Risk Management’s Spring Ritual
Reinsurance Renewals!
by Shari Spung
It happens every spring! Renewing UW’s reinsurance package, that is, and the process is lengthy, complex and challenging.
What’s a “reinsurance package?” UW purchases reinsurance to provide “insurance” above the levels funded by our own insurance company, Portage Bay Insurance (PBI). Such reinsurance provides protection for UW against severe, catastrophic losses that may occur. Reinsurance is purchased through reinsurance companies which specialize in evaluating complex risks.
Reinsurance companies require a large amount of information before agreeing to insure PBI and deciding how much to charge us. The Office of Risk Management begins assembling information in January each year, with help from our insurance broker and UW’s independent actuary. A few months later, an auditor hired by the reinsurance companies visits the Office of Risk Management and performs a thorough review of our program, the staff, and UW’s overall risks. By April, the staff in Risk Management has prepared a large book that contains complete information on the risks at UW and the Risk Management program. The book then gets carried to Bermuda and London, where most reinsurance companies are located, and helps present UW in the best possible light. This year, 15 meetings were held with various reinsurance companies who had interest in insuring UW.
The pinnacle is reached in late June when the interested reinsurance companies submit their quotes to UW for consideration. The companies and their quotes are carefully scrutinized, and special contract terms are negotiated back and forth. It’s usually June 30 th at 4:45 before the staff in Risk Management is satisfied that they’ve identified the package that will provide the best coverage UW can afford. When coverage begins on July 1 st, a sigh of relief and satisfaction is breathed in Risk Management! But not for long, as preparations soon begin for next year’s spring ritual of reinsurance renewal.
|
