State of Alabama Department of Finance Division of

State of Alabama Department of Finance Division of Risk Management Kim Huggins Claims Manager

ALABAMA April 27, 2011

The State Insurance Fund Originated in 1923 to insure state owned properties, K-12 school systems and state university properties 28, 000 +/- building/structures surveyed every three years by in house staff At FY 10 close, $46 Billion insured values Claims are handled by in house staff and/or independent adjusting firms on contract with SIF.

State of Alabama 2011 Property Program $1 B One Reinsurer provides $250 M x/o $750 M Excess Capacity $750 M One Reinsurer provides $250 M x/o $500 M Excess Capacity $500 M Three Reinsurers provide $300 M x/o $200 M Excess Capacity $200 M Nine Reinsurers provide $100 M x/o $100 M Seven Reinsurers provide $50 M x/o $50 M Six Reinsurers provide $50 M x/o SIR $3. 5 M S. I. R. = $3. 5 M All Other Perils Occurrence/$10 M Named Storm Occurrence/ $10 M Annual Aggregate

Statewide Impact of April 27, 2011 62 Tornados - 3 EF-5 - 8 EF-4 - 7 EF-3 240 Deaths $3 Billion In Insured Losses 120, 000 Claims

Historic Tornado Outbreak April 27, 2011

IMPACT OF APRIL 27, 2011 ON SIF $110 M Reserved 588 Claims 215 Locations 8 Exceeding $5 M 6 K-12 Schools 1 Community College 1 State Park 10 Exceeding $1 M

Hackleburg Elementary/High School

Phil Campbell High School

Alberta Elementary School

SIF Comparison of Catastrophe Losses Category Ivan Cat 46 9/16/2004 4/27/2011 Counties Impacted 53 33 Agencies Impacted 102 60 Locations Impacted 500 215 2453 588 $30 Million $110 Million Location Claims $5 M + 1 8 Location Claims $1 M + 3 10 Date of Loss Number of Claims Amount of Loss

Summary Analysis o Ivan was a Category 3 Hurricane n Impacted a large portion of Alabama n Major damage to only a few locations o Cat 46 was a series of EF 3, 4 & 5 Tornadoes n Impacted a large portion of Alabama n Major damage to a large number of locations

ISSUES

Coordination o Coordination with Excess Carriers n Assignment of the lead adjuster n Third Party Experts p Engineers p Estimators p Accountants p Salvagers n Broker’s Role.

Communication o Communication with SIF Policy Holders n Role of Risk Management n Immediate and Clear Instruction n Availability of Advance Funds.

Independent Adjusters o Role of Independent Adjusters n Our Representative n Works with Excess Adjusters and Experts n Directs and Manages Claim

Delays o By Excess Experts to Provide n Building Estimates n Scopes o By SIF Policyholders to n Initiate Emergency Restoration due to State Bid Law rules.

On A Positive Note o Our Broker helped us resolve issues quickly and is currently working with excess on specific guidelines to follow after a CAT Loss o Our Independent Adjusters remained loyal to the SIF o The SIF made advance funds immediately available to hardest hit locations.

ALABAMA Department of Finance Risk Management Division Questions?