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London Borough of Islington/Homes for Islington

Leasehold Insurance Policy

Islington Leaseholder Association Meeting

11th April 2012

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Representatives from JLT Public Sector Risks

• Julia Reffell – Executive Director• Alison Goodwin – Account Executive

• JLT are the appointed insurance broker to London Borough of Islington in respect of the Leasehold Insurance Policy

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Agenda

• Structure Chart• Claims terminology• Claims experience and analysis of claims• Application of policy excess• Questions and answers

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Structure Chart

London Borough of Islington

Leaseholders

Ocaso

(Insurer)

JLT

(Insurance Broker)

Davies Loss Adjusters

(Loss Adjusters)

DMS

(Claims Handlers)

Homes for Islington

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Claims Terminology

• Total Loss Paid• The amount actually paid by insurers to the insured for incurred claims

• Current Reserve• The amount that is reserved at that point against all claims but which has not

yet been paid

• Total Cost Incurred• The total sum of the Total Claims Paid and Total Claims Reserve

• Loss Ratio• The Total Cost Incurred divided by Total Premium Paid for one insurance

period

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Claims experience and analysis of claims

• Seven year claims experience

• Date of Preparation : February 2012

• Source of Information : Ocaso SA UK

Policy Year Number of Claims

Total Loss Paid Total Adjuster Paid

Current Reserve Total Loss Incurred

Premium Paid Loss Ratio

2005/2006 519 £ 701,209.39 £ 90,693.47 £ 39,449.00 £ 831,351.86 £ 941,621.19  88.28%

2006/2007 562 £ 719,639.56 £ 94,963.15 £ 29,896.37 £ 844,499.08 £ 820,268.20  102.95%

2007/2008 580 £ 837,164.25 £ 113,489.04 £ - £ 950,653.29 £ 966,978.54  98.31%

2008/2009 513 £ 918,046.16 £ 96,375.86 £ 94,450.00 £ 1,108,872.02 £ 1,168,224.79 94.91% 

2009/2010 532 £ 959,883.13 £ 90,641.01 £ 6,500.01 £ 1,057,024.15 £ 1,495,256.33 70.69% 

2010/2011 423 £ 736,461.24 £ 64,976.02 £ 145,540.27 £ 946,977.53 £ 1,496,322.08 63.28% 

2011/2012 343 £ 235,040.23 £ 18,605.98 £ 348,348.62 £ 601,994.83 £ 1,602,798.64 37.55% 

Grand Total 3472 £ 5,107,443.96 £ 569,744.53 £ 664,184.27 £ 6,341,372.76 £ 8,491,469.77  76.67%

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Claims experience and analysis of claims

• Claims split by peril for 2009/20102009/2010    

Loss Description Count of Policy Year Total Loss Incurred Average Claims Cost

ACCIDENTAL DAMAGE 124 £ 205,713.15 £ 1,658.98

ATTEMPTED BREAK-IN 4 £ 7,995.61 £ 1,998.90

ESCAPE OF WATER 280 £ 733,016.19 £ 2,617.91

FIRE 11 £ 11,407.85 £ 1,037.08

FLOOD 2 £ 26,548.54 £ 13,274.27

GLASS/HOBS/MIRRORS/SANITARY WARE 18 £ 12,835.77 £ 713.10

INGRESS OF WATER 10 £ 6,973.00 £ 697.30

LIABILITY 1 £ - £ -

MALICIOUS DAMAGE 23 £ 10,487.43 £ 455.98

STORM 8 £ 46,286.98 £ 5,785.87

SUBSIDENCE 18 £ 25,780.00 £ 1,432.22

THEFT 12 £ 9,375.32 £ 781.28

UNDERGROUND SERVICES 5 £ 3,605.00 £ 721.00

Grand Total 516 £ 1,100,024.84 £ 2,131.83

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Claims experience and analysis of claims

• Claims split by peril for 2011/20122011/2012    

Loss Description Count of Policy Year Total Loss Incurred Average Claims Cost

ACCIDENTAL DAMAGE 60 £ 41,458.51 £ 690.98

ATTEMPTED BREAK-IN 5 £ 2,380.20 £ 476.04

ESCAPE OF WATER 211 £ 422,516.15 £ 2,002.45

FIRE 5 £ 73,725.82 £ 14,745.16

GLASS/HOBS/MIRRORS/SANITARY WARE 15 £ 6,339.60 £ 422.64

INGRESS OF WATER 8 £ 1,140.00 £ 142.50

MALICIOUS DAMAGE 9 £ 4,320.01 £ 480.00

STORM 3 £ 2,379.34 £ 793.11

SUBSIDENCE 4 £ 21,170.00 £ 5,292.50

THEFT 20 £ 26,300.20 £ 1,315.01

TRACE AND ACCESS 1 £ - £ -

UNDERGROUND SERVICES 2 £ 265.00 £ 132.50

Grand Total 343 £ 601,994.83 £ 26,492.89

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Average Cost of Claims – 2010/2011 vs 2011/2012

  2010/2011 2011/2012

Loss Description Average Claims Cost Average Claims Cost

ACCIDENTAL DAMAGE £ 1,658.98 £ 690.98

ATTEMPTED BREAK-IN £ 1,998.90 £ 476.04

ESCAPE OF WATER £ 2,617.91 £ 2,002.45

FIRE £ 1,037.08 £ 14,745.16

GLASS/HOBS/MIRRORS/SANITARY WARE £ 713.10 £ 422.64

INGRESS OF WATER £ 697.30 £ 142.50

MALICIOUS DAMAGE £ 455.98 £ 480.00

STORM £ 5,785.87 £ 793.11

SUBSIDENCE £ 1,432.22 £ 5,292.50

THEFT £ 781.28 £ 1,315.01

TRACE AND ACCESS £ - £ -

UNDERGROUND SERVICES £ 721.00 £ 132.50

Grand Total £ 2,131.83 £ 26,492.89

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Application of policy excessCurrent policy excess• £150 in respect of escape of water

• £1,000 in respect of subsidence, landslip or heave

• £100 in respect of all other claims

Payment of policy excess• In respect of each and every flat

So in the event of an escape of water that affects 2 leasehold flats, each leaseholder has to pay their own excess (total value of excesses paid £300)

• In respect of each and every loss

So if one flat suffers 3 separate incidents of water damage, 3 lots of excess i.e. £450 will be payable by the leaseholder

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The leaseholder is always responsible for payment of their policy excess

When an Insurance policy is in joint names (London Borough of Islington and leaseholders) the insurer can not make a recovery from the other insured party, even if they believe this party are responsible for the damage.

Ocaso can only recover settled claims where they believe a third party (i.e. not when the leaseholder or London Borough of Islington) has been negligent so they could consider a recovery from

• A contractor• A tenant

You can only recover your own money so Ocaso can not recover a leaseholders excess on their behalf nor could a leaseholder recover Ocaso’s money

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• Tenants

It is not Ocaso’s policy to recover paid claim costs from tenants for a number of reasons.

– The degree of investigation that is required in proving the tenant is negligent

– The costs of making the recovery balanced against the likely success

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Questions and answers