Transcript Slide 1

Safety, Health, Environment & Risk Management
Risk Finance Summary for
Work Force & Property Exposures:
FY08 Experience and FY09 Projections
Annual Property and Workforce Insurance Premiums, by Policy Type, with Proportion That Might
be Potentially Influenced by EH&S Efforts (based on FY09 data)
$1,600,000
Annual Premium
$1,400,000
$1,200,000
Portion possibly influenced by EH&S activities
$1,000,000
Portion driven by size, construction type, and physical
location
$800,000
Portion driven by injury frequency and severity
$600,000
Portion driven by payroll and head
count
$400,000
Portion driven by loss
frequency and severity
Portion driven by
asset value
$200,000
$*Property
Employee WC
*Does not include flood premium on all buildings
CPPP PAM Elements That Might Be Readily Influenced By
EH&S Operations
Emergency Planning
Fire Department
5%
Response
Building Size
5%
15%
Exposure
5%
Water Supply
Fire Sprinklers
10%
15%
Occupancy
Classification
10%
Campus
Construction
Management
Classification Fire System
Programs
Supervision
10%
15%
10%
Resident WC
Fleet
Equipment
Floater
UTHSC-H Employee Injury Reports and
Workers’ Compensation Insurance Premium Trends, FY01 to 09
Note: insurance premium influenced predominantly by market conditions, employee census, employee payroll, and injury frequency and severity
Annual Employee Census
Annual Employee Payroll in Thousands of Dollars
Oversight by SHERM
$400,000
5,000
4,000
3,000
2,000
1,000
0
$300,000
$200,000
$100,000
$0
2003
2004
2005
2006
2007
2008
2009
2003
2004
Fiscal Year
2005
2006
2007
2008
2009
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
- $123,753
$800,000
188 fewer reported injury events
compared to FY 03
400
- $293,331
$600,000
- $348,718
$400,000
200
105 fewer injuries requiring
medical compared to FY 03
0
2003
2004
2005
2006
Fiscal Year
2007
2008
2009
- $568,998
- $558,772
2008
2009
$200,000
$0
2003
2004
2005
2006
2007
Fiscal Year
$1,893,572
in total
premium
savings
since FY03
Resource Allocation Program Rebates
$1,000,000
$800,000
$600,000
$227,000 in RAP
reduction in
FY09 as
compared to
peak of $436,100
in FY07
$400,000
$200,000
$0
2003
2004
2005
2006
2007
Fiscal Year
2008
2009
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
Fiscal Year
400
300
200
100
0
2005
2006
Fiscal Year
2006
2007
2008
2009
2010
Annual Policy Premium
Increase due
predominantly to
needlesticks.
Targeted
investigation and
interventions
underway
2004
2005
Fiscal Year
Total Number of First Reports of Injury and Subset of
Compensible Claims Submitted to Insurer
2003
2004
2007
2008
2009
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
$80,000 in
total
premium
savings
since peak in
FY06
2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Year
Annual policy premium reduction from
FY09 to FY10 of $6,000
Texas Mutual Dividend Payments
$80,000
$60,000
Total of $124,581
in dividend
payments since
SHERM oversight
$40,000
$20,000
$0
2003
2004
2005
2006
Fiscal Year
2007
2008
2009
Workers’ Compensation Insurance Premium Adjustment for
UTS Health Components Fiscal Years 2003 to 2009
(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
2013
Projected Workers’ Compensation Insurance Premium Adjustment for
UTS Health Components for Fiscal Year 2013
(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
0.60
0.50
0.40
0.30
0.20
Projected highest i n clas s pr emi um adjustment 0.20
0.10
Projected poor est UTHSCH performanc e 0.12
Steady state UTHSCH perfor manc e 0.09
Projected best UTHSCH perfor manc e 0.07
Projected lowest in class premium adj ustment 0.05
0.00
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Possible Range of Annual WCI Premium
(Assuming no change in population, payroll, or other influencing factors)
Estimated Premium
2010
Upper bound similar to
UTMB/UT Southwestern
No Change
Lower bound similar to
UTMDACC
$338,000
2011
2012
2013
$363,000
(+$25,000)
$388,000
(+$50,000)
$413,000
(+$75,000)
$ 338,000
$ 338,000
$ 338,000
$313,000
(-$25,000)
$288,000
(-$50,000)
$263,00
(-$75,000)
UTHSC-H Comprehensive Property Protection Program (CPPP) Insurance Premium
Total FY09 Premium $1,338,001
$1,600,000
Limited Wind and Flood Coverage
for MSB only, economically
obtainable in 2007
$1,400,000
$1,200,000
Commercial Wind & Flood
Reinsurance*
Premium $810,640
Deductible $50MM
Coverage Limit $100MM
Premium
$1,000,000
$800,000
$600,000
Wind & Flood Self Insurance
Premium $268,000
Deductible $250K
Coverage Limit $50MM
$400,000
Fire & All Other Perils
Premium $240,000
Deductible $250K
Coverage Limit $1B
$200,000
$0
2004
2005
2006
2007
2008
2009
Year of Coverage
*MHH Increase in BI coverage from FY08-FY09, $49MM to $75MM
FY09 Premium reduced by $290K, due to scheduled risk control measures
(robust EMP, flood doors, training, etc.) and risk based loss estimates.
FY08 Property Losses
Retained Property Loss Summary By Peril
- Losses Incurred but covered by UTS
Comprehensive Property Protection Program
(Total FY08 losses by cause and amount in dollars, Total Loss~$245,970)*
The CPPP did not experience any losses from UTHSC-H
Metro Bus
Theft**
- Losses incurred but covered by third party
Water Related
Metro Bus damage to the Ross Sterling Breezeway at
MSB, $25,000
Criminal Mischief**
- Retained Losses
Hurricane Dolly estimated loss to UTHSC-H Brownsville,
RAHC $125,000
Eight of twelve retained losses were water related losses
at an average cost of $1900 per loss
Hurricane Dolly
(RAHC)
*Not inclusive of any recorded capital assets inventory irregularities. For
additional information contact UTHSC-H Capital Assets Management
**Estimate based on replacement cost of damaged property
Retained Property Loss Summary by Peril, FY06 to FY08*
$500,000
$450,000
Other Loss
$400,000
Theft**
Other Loss
$350,000
Theft**
$300,000
$250,000
Metro Bus
$200,000
Water Related
Theft**
Water Related
$150,000
$100,000
Hurricane Dolly
$50,000
Water Related
$FY06
FY07
FY08
*Not inclusive of any recorded capital assets inventory irregularities. For
additional information contact UTHSC-H Capital Assets Management
**Estimate based on replacement cost of damaged property
Help Avoid the 3 Main Causes of Property Loss at UTHSC-H
The three main causes of property loss at UTHSC-H in FY06 were water leaks, theft, and electrical power interruption. These three perils resulted in over
$331,000 in direct loss and untold disruption to teaching, research, and service activities. The deductible for the UTS Comprehensive Property Protection
Program is $250,000 per occurrence, in FY06 none of the losses exceeded the per occurrence deductible, however the sum of retained losses exceeded the
deductible by $140,000. In special cases additional insurance can be purchased*. Summarized below are simple steps that can be taken to avoid such losses.
Potential For Loss
Simple Prevention Measures
For more information and
assistance
Water Damage
Water damage accounted for $221,000 of
loss in FY06. Water can enter a lab or office
from the same floor or from the floor above.
Move equipment off of the floor and
cover when not in use. Evaluate
possible purchase of supplemental
insurance for certain types of
equipment*
Contact Facilities Planning
and Engineering for more
information, (713)500-3498.
Theft
Theft accounted for $90,114 of loss in FY06,
the majority of which were theft of laptops,
PDAs and cell phones.
Secure laptops, PDA’s, or cellular
phones. Always backup data and
keep it in a physically separate
location. For more information about
how to lock a PC or laptop:
http://www.uth.tmc.edu/med
/msit/howdoi/physical_security.htm
Evaluate possible purchase of
supplemental insurance for certain
types of equipment*
Contact University of Texas
Police Department for more
information, (713)794-4357.
Electrical Power Interruption
Electrical power disruption accounted for
$20,000 worth direct losses in FY06.
However this is not reflective of the loss of
priceless research specimens.
Ensure that all critical equipment has
backup power or has the ability to alert
local personnel when power or
temperature is disrupted. The
production of duplicate or split
samples is encouraged. Finally, some
buildings are equipped with the
necessary infrastructure to provide
monitoring of temperature.
Contact Facilities Planning
and Engineering for more
information, (713)500-3498.
*Information about the purchase of additional insurance can be obtained by contacting Risk Management; 713-500-8100.
Enhanced Risk Assessment & Control Services
Services Provided
– Institutional exposures objectively ranked by value exposed to loss; revenue,
expenses, and total assets
– Targeted analysis on specific risk exposures and the development of risk control
techniques to mitigate loss, provide assistance with installation, and
implementation
– Assess and analyze existing and potential risk financing options
– Assist in development of customized Business Continuity Plan for unit
– Inventory and document assets to facilitate recovery in event of loss
Units Served to Date
– Gulf Coast Hemophilia, Neurobiology and Anatomy, Microbiology and Molecular
Genetics, and The Biotechnology Center
Other Policies
Fleet Insurance
Liability
SHERM
Comp/Coll
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
Equipment Floater
Rate
(per $100 of insured value)
SHERM
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
*Not Inclusive of current SHERM administrative processing fee of $0.46
Other Policies
Endowment Policy (Property and Liability)
Total Insured Value
FY05*
Loses
Annual Premium
$5,462
$0
$3,177
$0
$0
$0
FY07**
$53,254
$0
$2,746
FY08**
$53,254
$0
$7,129
FY06
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
*For Liability only at 1246 FM Hwy 102, Eagle Lake, TX -$5,735 - $2,558 for property
deletion 8/31/2004
**For Liability only at 1133 John Freeman Boulevard - The property was added
06/01/2006 premium pro-rata
Cost of Risk Transfer
Policy
FY08 Paid
FY09 Estimated or Paid
Change
Net Change
Employee WC
$
324,477
$
335,710
3%
$
11,233
Resident WC
$
167,761
$
161,927
-3%
$
(5,834)
Fine Arts - Multiple Locations
$
1,000
$
1,000
0%
$
-
Mobile Diagnostic Equipment
$
5,301
$
5,566
5%
$
265
Auto
$
37,181
$
38,178
3%
$
997
CPPP Fire & AOP Premium
$
229,612
$
256,234
12%
$
26,622
CPPP Named Windstorm & 100-Yr Flood*
$
474,502
$
268,375
-43%
$
(206,127)
Commercial Named Windstorm & 100-Yr Flood
$
398,277
$
810,064
103%
$
411,787
Equipment Policy
$
19,782
$
26,950
36%
$
7,168
Policy Premium Total
$ 1,657,893
$
1,904,004
15%
$
246,111
*NFIP places policies on individual locations, such as UT Apts
*Paid out of the Named Windstorm & 100-Yr Flood
Discussion Items
1.
Despite best management efforts, market conditions and UT
System loss experience have increased wind and flood premiums
by 56%
2.
Due to these changes, RMI suggests consideration of removal of
all NFIP and TWIA coverage that is not required by the CPPP and
resides outside the 500yr floodplain. Projected savings of
$75,000
3.
Current status of retained loss pool?
4.
Despite continual reductions in WCI losses, rebate amounts
continue to diminish. The Employee Health program will likely
require an additional $70,000/yr to meet UTHSC-H’s employee
health obligations to make up for the shortfall.
Appendix A
Universe of UTHSC-H Insurance Policies by Total Premium Cost and
Management Unit (based on FY08 data)
$3,000,000
Insurance policies m anaged by SHERM
$2,500,000
Insurance policies m anaged by Legal Affairs
$2,000,000
$1,500,000
$1,000,000
$7K
$19K
$23K
$40K
$1K
$500,000
*Does not include flood premium on all buildings
C
Ar
ts
Fi
ne
m
en
t
En
do
w
ri m
e
om
m
er
ci
al
C
Fl
oa
te
r
Fl
ee
t
Eq
ui
pm
en
t
&O
D
W
C
es
id
en
t
R
Em
pl
oy
ee
W
C
In
s.
ne
m
pl
oy
m
en
t
ro
pe
rty
U
*P
M
al
pr
ac
ti c
e
$0
M
ed
ic
al
Annual Premium
Insurance policies m anaged by Hum an Resources
UTHSC-H Comprehensive Property Protection Program (CPPP) Insurance Premium
Total FY09 Premium $1,338,001
$1,600,000
Limited Wind and Flood Coverage for
MSB only, economically obtainable in
2007
$1,400,000
$1,200,000
Commercial Wind & Flood
Reinsurance*
Premium $810,640
Deductible $50MM
Coverage Limit $100MM
Premium
$1,000,000
$800,000
$600,000
Wind & Flood Self Insurance
Premium $268,000
Deductible $250K
Coverage Limit $50MM
$400,000
Fire & All Other Perils
Premium $240,000
Deductible $250K
Coverage Limit $1B
$200,000
$0
2004
2005
2006
2007
2008
2009
Year of Coverage
*MHH Increase in BI coverage from FY08-FY09, $49MM to $75MM
FY09 Premium reduced by $290K, due to scheduled risk control measures
(robust EMP, flood doors, training, etc.) and risk based loss estimates.
FY08 Property Losses
Retained Property Loss Summary By Peril
- Losses Incurred but covered by UTS
Comprehensive Property Protection Program
(Total FY08 losses by cause and amount in dollars, Total Loss~$245,970)*
The CPPP did not experience any losses from UTHSC-H
Metro Bus
Theft**
- Losses incurred but covered by third party
Water Related
Metro Bus damage to the Ross Sterling Breezeway at
MSB, $25,000
Criminal Mischief**
- Retained Losses
Hurricane Dolly estimated loss to UTHSC-H Brownsville,
RAHC $125,000
Eight of twelve retained losses were water related losses
at an average cost of $1900 per loss
Hurricane Dolly
(RAHC)
*Not inclusive of any recorded capital assets inventory irregularities. For
additional information contact UTHSC-H Capital Assets Management
**Estimate based on replacement cost of damaged property
Retained Property Loss Summary by Peril, FY06 to FY08*
$500,000
$450,000
Other Loss
$400,000
Theft**
Other Loss
$350,000
Theft**
$300,000
$250,000
Metro Bus
$200,000
Water Related
Theft**
Water Related
$150,000
$100,000
Hurricane Dolly
$50,000
Water Related
$FY06
FY07
FY08
*Not inclusive of any recorded capital assets inventory irregularities. For
additional information contact UTHSC-H Capital Assets Management
**Estimate based on replacement cost of damaged property