art “music to our ears” · greater washington says • members of the federation first...
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©2019 ARTHUR J. GALLAGHER & CO.
ART “Music to our Ears”Peter A. Persuitti, Global Managing Director
Religious | Nonprofit Practices September 2020
2©2020 ARTHUR J. GALLAGHER & CO. | AJG.COM
Collaboration is Critical | Networking is Empowering
• “Common Ground” event for 17 years. Co-Creation Insurance Board CEO and Gallagher’s Religious Practice
• “Convocation”(raise over $280K)
Kudos to You…
3©2020 ARTHUR J. GALLAGHER & CO. | AJG.COM
• Pricing
• Availability
• Limits
P&C Insurance Pricing Up Sharply
6 Page Document with
Link to more generic
insurance overview
version
©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM
AGENDA
• What is ART?
• Why is it important now?
• How does a NGO evaluate the potential of ART?
Peter Persuitti
5©2020 ARTHUR J. GALLAGHER & CO. | AJG.COM
• “Alternative Risk Transfer”
• “Alternative” no longer accurate, given the number of
organizations resorting to self-insurance strategies (>50%)
• Risk Financing Strategy vs. Insurance Buying Dependency
• Profit Center mindset – Loss Fund
• “Unbundling” Claims and Risk Management Services
• Data Analytics
What is ART? Traditional Insurance ART
6©2020 ARTHUR J. GALLAGHER & CO. | AJG.COM
• Depending on size of your P&C “TCOR” (Total Cost of Risk)
• Master Policy | Captive Vehicles
– Alone “Single Parent”
– With a Group (Combinable, Homogeneous)
– Oversight | Regulatory
– Protection of Assets
Alone or with a Group
Master Policy Program
Captive
Rent-a-Captive
Protected Cell Captive
Trust
Risk Retention Group
Risk Purchasing Group
7©2020 ARTHUR J. GALLAGHER & CO. | AJG.COM
• Focus singularly on P&C
• Include both large expenses:
– P&C deductibles or SIRs, uninsurable
– H&W stop loss
P&C or P&C | H&W
8©2020 ARTHUR J. GALLAGHER & CO. | AJG.COM
• Portfolio – All Key Lines of Coverage
• Loss Fund for funding all SIRs (Self-Insured Retentions and Uninsured)
– Cash Flow Benefit
– Five Year pay out for policy year (short tail, long tail coverages)
– Incident, Claims management & control
• One Reinsurer to provide coverage up to First Million (or more)
• Excess “Follow Form” specialized carriers above
– Property (per occurrence) | Loss Limit based on PML
– Liability | Loss Limit (and sublimits on SAM, EPLI, D&O, Auto)
– WC Statutory
– Crime
Unique P&C “Risk Financing”
Approach
ALA
All-Lines Aggregate
ART
Alternative Risk Transfer
9©2020 ARTHUR J. GALLAGHER & CO. | AJG.COM
NGO | Group Loss Fund
Broad, Manuscripted
Form
Follow Underlying
Broad Form
ALA
All-Lines Aggregate
ART
Alternative Risk Transfer
All-Lines Aggregate
10©2020 ARTHUR J. GALLAGHER & CO. | AJG.COM
The Math of ART – A Science
Reduce
Fixed
Costs
Improve
Cash Flow
11©2020 ARTHUR J. GALLAGHER & CO. | AJG.COM
• It is a proven methodology for nonprofits
• Brings Stability – Insurance marketplace is hard and unpredictable
• Reduced TCOR - Redirect dollars to mission versus recurring fixed costs
• You Control
– Data (RMIS System through TPA)
– Outcomes
– Reputation
– Costs & Profits
Why is ART important now?
12©2020 ARTHUR J. GALLAGHER & CO. | AJG.COM
• Single Organization – $ Spend
– Ownership Mindset – Profit Center
– Coverages
– Exposures
– TCOR
• Group – Likeminded organizations
– Member-owned Program
– Leverage premium
– Spread of Risk
– Collaboration
– Build Surplus to take more risk, provide returns
How does a NGO evaluate the
potential of ART?
13©2020 ARTHUR J. GALLAGHER & CO. | AJG.COM
• Cyber………………………………
• Fiduciary
• Foreign
• Volunteer Accident
This is not a coverage in the ART
portfolio (at least now)
• $7.5 million stolen in hack, Jewish Federation of
Greater Washington says
• Members of the federation first discovered the
hack Aug. 4, when its information-technology
contractor detected suspicious activity in an
employee's email account. They said authorities
believe the hackers first gained access to its
system in early summer.
©2020 ARTHUR J. GALLAGHER & CO.
ART “Music to our Ears”Peter A. Persuitti, Global Managing Director
Religious | Nonprofit Practices September 2020
Thank you and good luck with your
networking and collaboration
Thank You
Grazie
Mulțumesc
Dankie
Thank You
Grazie
Ngiyabonga
Takk skal du ha
Gratias tibi
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