State of AlabamaDepartment of Finance

State of AlabamaDepartment 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 FY10 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

One Reinsurer provides $250M x/o $750M Excess Capacity

One Reinsurer provides $250M x/o $500M Excess Capacity

Three Reinsurers provide $300M x/o $200M Excess Capacity

Nine Reinsurers provide $100M x/o $100M

Seven Reinsurers provide $50M x/o $50M

Six Reinsurers provide $50M x/o SIR

S.I.R.= $3.5M All Other Perils Occurrence/$10M Named Storm Occurrence/ $10 M Annual Aggregate

$1 B

$750M

$500M

$200M

$100M

$50M

$3.5M

Statewide Impact ofApril 27, 2011

62 Tornados - 3 EF-5- 8 EF-4- 7 EF-3

240 Deaths

$3 Billion In

Insured Losses

120,000Claims

Historic Tornado OutbreakApril 27, 2011

IMPACT OF APRIL 27, 2011

ON SIF$110M Reserved

588 Claims

215 Locations

8 Exceeding $5M

6 K-12 Schools

1 Community College

1 State Park

10 Exceeding $1M

Hackleburg Elementary/High School

Phil Campbell High School

Alberta Elementary School

SIF Comparison of Catastrophe Losses

Category Ivan Cat 46

Date of Loss 9/16/2004 4/27/2011

Counties Impacted 53 33

Agencies Impacted 102 60

Locations Impacted 500 215

Number of Claims 2453 588

Amount of Loss $30 Million $110 Million

Location Claims $5M + 1 8

Location Claims $1M + 3 10

Summary Analysis

Ivan was a Category 3 Hurricane

Impacted a large portion of Alabama

Major damage to only a few locations

Cat 46 was a series of EF 3, 4 & 5 Tornadoes

Impacted a large portion of Alabama

Major damage to a large number of locations

ISSUES

Coordination

Coordination with Excess Carriers Assignment of the lead adjuster

Third Party Experts Engineers

Estimators

Accountants

Salvagers

Broker’s Role.

Communication

Communication with SIF Policy Holders

Role of Risk Management

Immediate and Clear Instruction

Availability of Advance Funds.

Independent Adjusters

Role of Independent Adjusters

Our Representative

Works with Excess Adjusters and Experts

Directs and Manages Claim

Delays

By Excess Experts to Provide

Building Estimates

Scopes

By SIF Policyholders to

Initiate Emergency Restoration due to

State Bid Law rules.

On A Positive Note

Our Broker helped us resolve issues quickly and is

currently working with excess on specific guidelines to

follow after a CAT Loss

Our Independent Adjusters remained loyal to the SIF

The SIF made advance funds immediately available to

hardest hit locations.

ALABAMADepartment of FinanceRisk Management Division

Questions?