Transcript Slide 1

Safety, Health, Environment & Risk Management
UTHSC-H Risk Finance Summary for
Workforce & Property Exposures
April 29, 2011
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UTHSC-H Employee Injury Reports and
Workers’ Compensation Insurance Premium Trends, FY03 to FY10
Note: premium calculation based on employee payroll(30%), and injury frequency(20%) and severity(50%)
Annual Employee Census
Annual Employee Payroll in Thousands of Dollars
Oversight by SHERM
$500,000
5,000
4,000
3,000
2,000
1,000
0
$400,000
$300,000
$200,000
$100,000
$0
2003
2004
2005
2006
2007
2008
2009
2010
2003
Fiscal Year
2004
2005
2006
2007
2008
2009
2010
Fiscal Year
Total Number of First Reports of Injury and Subset of
Compensible Claims Submitted to UT System
Annual Policy Premium
$1,000,000
600
185 fewer
reported
injuries
compared to
FY03
400
200
Medical claim
costs reduced
$112,543
compared to
FY03
0
2003
2004
2005
2006
2007
Fiscal Year
2008
2009
2010
$800,000
$600,000
$400,000
$200,000
$0
2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Year
2
Resource Allocation Program Rebates
$500,000
$400,000
$300,000
$262,000
reduction in RAP
funding in FY10
as compared to
peak in FY07
$200,000
$100,000
$0
2003
2004
2005
2006
2007
2008
2009
2010
Fiscal Year
3
UTHSC-H Residents’ Injury Reports and
Workers’ Compensation Insurance Premium Trends, FY03 to 10
Note: insurance premium influenced predominantly by market conditions, employee census, employee payroll, and injury frequency and severity
Annual Residents Census
1,000
Annual Residents Payroll in Thousands of Dollars
Oversight by SHERM
$50,000
800
$40,000
600
$30,000
400
$20,000
200
$10,000
0
2003
2004
2005
2006
2007
2008
2009
2010
$0
2003
2004
2005
Fiscal Year
2006
2007
2008
2009
2010
Fiscal Year
Total Number of First Reports of Injury and Subset of
Compensible Claims Submitted to Insurer
Annual Policy Premium
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
400
300
200
100
0
2003
2004
2005
2006
2007
Fiscal Year
2008
2009
2010
2003
2004
2005
2006
2007
2008
2009
2010
Fiscal Year
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Texas Mutual Dividend Payments
$80,000
$60,000
Total of $238,131 in
dividend payments
since 2006
$40,000
$20,000
$0
2003
2004
2005
2006
2007
2008
2009
2010
Fiscal Year
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Workers’ Compensation Insurance Premium Adjustment for
UTS Health Components Fiscal Years 2003 to 2010
(discount premium rating as compared to a baseline of 1, three year rolling average adjusts rates for subsequent year)
1.00
0.90
0.80
0.70
Oversight by SHERM
0.60
0.50
0.40
0.30
0.20
UT Southwestern Dallas (0.17)
UT Medical Branch Galveston (0.16)
UT HSC San Antonio (0.12)
UT HSC Tyler (0.09)
UT HSC Houston (0.09)
UT MD Anderson Cancer Center (0.05)
0.10
0.00
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
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UTHSC-H Comprehensive Property Protection Program (CPPP) Insurance Premiums
2005-2011
$1,600,000
$1,400,000
$1,200,000
Premium
$1,000,000
Named
Windstorm
Premium
$800,000
$600,000
$400,000
$200,000
Fire and all
other perils
premium
$0
2005
2006
2007
2008
2009
2010
2011
Year of Coverage
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2011 CPPP Structure - Fire and All Other Perils
$1 billion
Fire & All Other Perils
(Excluding Named Windstorm)
Commercial Insurance Policy
$850m Layer
$150 million
Fire & All Other Perils
(Excluding Named Windstorm)
Commercial Insurance Policy
75% of $150m Layer
UT Share
25% of $150m Layer
50% Inst.
w/Loss
50% All
Institutions
$5 million
50% Inst.
With Loss
50% All
Institutions
$250,000
Institution Deductible $250k
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2011 CPPP Structure - Named Windstorm
$200 million
UT Share
25% of $150m Layer
Named Windstorm
Commercial Insurance Policy
75% of $150m Layer
Interim
Financing
40%
Institution
with Loss
Interim
Financing
60% Fund
$50 million
Interim Financing
40%
Institution
With Loss
Interim Financing
60%
Fund
Institution Deductible $250k
$250,000
NFIP & TWIA policies
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Loss Scenarios – Insurance Carrier Payouts
Old Structure
Carrier Payout
Loss Scenario
$2.5M Boiler Loss (BBS SP)
New Structure
UTHealth Payout
Carrier Payout
UTHealth Payout
$2,400,000
$100,000
$1,800,000
$419,200
$150M Fire Loss (UTPB)
$145,000,000
$2,910,000
$116,000,000
$22,062,000
$200M NWS Loss (MSB)
$100,000,000
$112,500,000
$43,875,000
 Policy Deductibles: $100,000 Equipment Breakdown; $5M Fire and AOP;
$50M NWS (Galveston and TMC)
 All payouts shown are excess of applicable policy deductibles.
 UT’s 25% pro-rata share portions will be financed through CPPP Fund or
debt issuance.
 All financing through CPPP Fund or debt issuance will be replenished via
50/50 (Fire and AOP) or 40/60 (NWS).
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FY10 Property Losses
Retained Property Loss Summary By Peril

Retained Losses
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Water damage NSH $10,000
Water damage SON $35,000
Water damage NSH $1000
Water damage UCT $1000
Water damage SRB $20,000
Water damage NSH $7,000
Water damage UCT $1000
Water damage SON $500
Water damage SON $600
Water damage MSB $2000
Water damage UCT $500
Water damage MSB $1000
Hurricane damage RAHC $4000
Various thefts (87) $17,400
Total Retained Losses $85,200
(Total FY10 losses by cause and amount in dollars,
Total Loss~$85,200)
Theft
Hurricane
Water


Losses incurred by but covered by third party

N/A
Losses incurred and covered by insurance

N/A
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UTHSC-H CPPP Premium Allocation Model Score
vs. UTS Average
74.00
72.00
*
70.00
UT HSC Houston
68.00
UTS Average
66.00
64.00
62.00
60.00
2007
2008
2009
2010
*A premium credit is provided for scores in excess of 70.00
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Other Policies
Fleet Insurance (n=79 vehicles)
Liability
Comprehensive/Collision
Losses
Premium
FY03
$189
$334
$96,052
$43,322
FY04
$169
$349
$2,610
$37,508
FY05
$234
$434
$20,074
$40,443
FY06
$230
$412
$905
$38,202
FY07
$230
$418
$846
$42,234
FY08
$252
$459
$6,518
$37,181
FY09
$216
$322
$19,791
$38,178
FY10
$212
$274
$10,552
$33,471
Equipment Floater
Rate*
(per $100 of insured value)
*Not Inclusive of
administrative
processing fee of
$0.46
Total Insured Value
Annual Premium
FY03
$0.42
$4,600,788
$19,390
FY04
$0.49
$3,083,582
$15,204
FY05
$0.42
$4,017,404
$16,870
FY06
$0.46
$3,581,709
$16,476
FY07
$0.54
$3,983,875
$23,414
FY08
$0.54
$3,487,380
$19,782
FY09
$0.54
$5,118,381
$26,949
FY10
$0.54
$4,890,127
$26,670
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Other Policies
Endowment Policy (Property and Liability)
Total Insured Value
Losses
Annual Premium
FY05
$5,462
$0
$3,177
FY06
$0
$0
$0
FY07
$53,254
$0
$2,746
FY08
$53,254
$0
$7,129
FY09
$102,942
$0
$14,220
FY10
$102,942
$0
$10,549
Fine Arts
Limit Based Premium
Losses
Annual Premium
FY05
$500,000
$0
$2,689
FY06
$500,000
$0
$200
FY07
$500,000
$0
$215
FY08
$500,000
$0
$906
FY09
$500,000
$0
$906
FY10
$500,000
$0
$906
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Total Cost of Risk Transfer
Workforce & Property
Insurance Policy
FY09 Paid
FY10 Estimated or Paid
Change
Net Change
Employee Workers Comp
$ 335,710
$ 338,682
1%
$2,972
Resident Workers Comp
$ 170,461
$162,305
-5%
-$8,156
Fine Arts
$ 1,000
$ 1,000
0%
$0
Auto
$ 38,178
$ 33,471
-12%
-$4,707
CPPP Fire & AOP Premium
$ 256,234
$ 247,174
-4%
-$9,060
CPPP Named Windstorm
$ 1,078,439
$ 1,088,281
1%
$9,842
Mobile Diagnostic Equipment
$ 5,566
$ 5,566
0%
$0
Equipment Policy
$ 26,950
$ 26,670
0%
$280
Policy Premium Total
$1,912,538
$ 1,903,149
-1%
-$9,389
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Discussion Items
1.
CPPP premium reduced 5.39% with a UTS increased exposure of
25% of the $5M -$150M portion of any fire and AOP loss and a
25% increased exposure of the $50M-$200M portion of any
named windstorm loss.
2.
Next years premium likely to see a significant increase due to
change in CAT model based on Hurricane Ike losses
3.
For a variety of reasons there is a significant decline in retained
losses-some due to our efforts, some due to chance.
4.
Despite continual reductions in WCI losses and premium, rebate
amounts continue to diminish. This is due to effort to reduce the
WCI fund down to the designated capitalization target amount.
This will eventually lead to the need for other sources of funding
for the Employee Health Services program.
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$3,500,000
Universe of UTHSC-H Insurance Policies by Total
Premium Cost and Management Unit
(based on FY10 data)
$3,000,000
Insurance policies managed by SHERM
Insurance policies managed by Legal Affairs
Insurance policies managed by Human Resources
$2,500,000
Annual Premium
Insurance policies managed by AE
$2,000,000
$1,500,000
$1,000,000
$30k
$33K
$26K
$19K
$10K
$5K
$1K
$500,000
$0
*Does not include flood premium on all buildings
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