art “music to our ears” · greater washington says • members of the federation first...

©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…


• 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


• “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


• 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


• 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


• 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


NGO | Group Loss Fund

Broad, Manuscripted

Form

Follow Underlying

Broad Form

ALA

All-Lines Aggregate

ART

Alternative Risk Transfer

All-Lines Aggregate


The Math of ART – A Science

Reduce

Fixed

Costs

Improve

Cash Flow


• 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?


• 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?


• 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

art “music to our ears” · greater washington says • members of the federation first...

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