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AMAI Centenary Annual

Conference14th September 2012

Insuring Public Bodies

Enda BrazelHead of Underwriting

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Founded in 1926 (soon after the foundation of the new State) – desire not to export scarce Irish capital to UK owned insurance companies. Legislation passed in Dáil to establish company

Initially only wrote Fire insurance, then later Motor and Liability – now full non-life underwriter in all the main classes of insurance

Grown successfully over 86 years to where it is today – a profitable, financially strong and solvent non-life insurer

Total assets 2010 - €1bn+

Position in market :

9th largest by GWP, 4th in Liability segment by GWP

Bigger liability book than RSA, Zurich, AIG

Our History

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IPB is a mutual insurance company - ownership and control of the company is vested in insuring members. All of its resources, including premiums, investment income and surplus assets, are available to provide financial strength and absorb underwriting losses (if any)

IPB is the only remaining 100% Irish owned and managed insurance company

Local – all decisions made here in Ireland

Low expense ratio

Regulated by the Financial Regulator, like all other insurers.

Dividend to members – 1st dividend paid in November 2011, totaling €10m – share in the success and financial strength of IPB

Mutuality – core to everything we do

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Financial Strength

No issued capital or shareholders – retained profit is IPB’s source of working capital. Pricing action taken 2002 onwards to build capital.

Cumulative Retained Profit (Capital) at year 2011 : €370.6m

Solvent – 29 times Solvency 1 requirement, well capitalised, well reserved

S&P Rated – BBB+, same as State, Allianz, Aviva, RSA

Proven – long history of insuring large risks, and paying claims

Why is Financial Strength important? – insurance is a long-term promise to pay

Quinn, SMDF, Presbyterian Mutual (NI), ICI

Claims may take many years to settle, or may not be made for many years

Insurance pays large claims

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Why Insure with IPB?

Insurance offers many benefits, including:

Transfer of risk from insured to insurer

Budget and financial certainty – the amount and timing of premium is known and agreed at commencement

Unforeseen events impact on the insurer’s balance sheet, not that of the insured

Insurers absorb large scale risk, and offer large indemnity protection limits

Risks are pooled by the insurer with risks of other insureds

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Who de we insure?

Core Markets:

Local Authorities – Town and County Councils

Education – 2nd level (VECs) and 3rd level (Universities and ITs)

Health – State funded health sector, hospitals

Care sector – national organisations providing services for people with intellectual disability

Misc./Others – Regulatory bodies, not-for-profits/Charities, group water schemes etc.

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Local Authorities

We insure Local Authorities – Town and County Councils – for all their activities:

Housing, drinking water, wastewater, fire service, refuse collection, road authority, sports and leisure facilities, playgrounds, skate-parks, libraries, swimming pools, defibrillators……

Large and small – large City Councils to small Town Commissioners

Buildings, vehicles, possessions and people

Buildings – e.g. Civic Offices DCC €160m+

Vehicles – specialised fire tenders valued at €250k+, gritters/ploughs etc.

Possessions – contents, equipment, art

People – employees, members of the public, members PA

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Claims

Insurance is a promise to pay:

Final delivery of the product

Chance to excel in how we deal with the claim

Complex claims

Large claims:

Cork City floods November 2009 – County Hall, Mardyke Arena

Catastrophic personal injury claims – road accidents

Emerging claims – planning process, defamation/libel/slander

Unusual claims

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Claims (ctd.)

Claim amounts paid to policyholders/claimants by year

2011 €91.5m

2010 €87.4m

2009 €89.8m

2008: €84.1m

2008-2011: €352.8m

No increase in overall new claims despite the recession – better court awards, Injuries Board, Civil Liability and Courts Act 2004

Insurance industry has paid claims totaling €892m from weather events in the 2 year period 2009-2011 – money spent in Ireland on Irish goods and services

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What else do we do?Risk management advice and services:

LA Risk 2005, VEC Risk 2009, Advice and Guidance in the event of Criminal Investigation 2010, Managing Risk for Public Events 2012, Health & Safety Technical Working Group 2012

Sponsorship:

LAMA Awards

Pride of Place

Consultation:

Members Consultative Forum (MCF) – 1st meeting July 2012

Bursaries/Educational Support:

DCU Access Scholarship

DCU GAA Sports Scholarship

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A new way of doing business

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PBD approachThe PBD approach stands for Place, Business, Difference

Our ambition is to be the leading place to work attracting the best people and working with all our other stakeholders to build a successful world class business reaping a social dividend to drive our CSE framework.

Our outline business strategy allows us to harness ambition in a healthy way. As we succeed in achieving our goals and reaching our targets this success will drive our social programme which in turn starts the cycle again.

Corporate Social Engagement - €5m social dividend fund announced in June 2012 – targeting education in particular.

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Corporate GoalsBuild on our rich heritage as a mutual insurer

Chart a roadmap to achieving our goal of creating a world class sustainable business

Create a truly ethical business reflecting the ethos of mutuality

Diversify our existing portfolio and client profile by identifying complimentary niche markets and developing new distribution channels and territories

Become the leading insurer in achieving compliance targets and regulatory requirements within both and Irish and international context

Working together to make a difference.

Thank You