Paul J. Miola, CPCU, ARM Executive Director

2017 Gloucester, Salem, Cumberland Counties Municipal Joint Insurance Fund

Annual Planning Retreat

July 27-28, 2017

HOUSEKEEPING

• Sign in • Retreat binders • Breaks and returns • Evaluation forms • Cell phones off please • Conversations to a minimum

2

This is Your Program

2016 RETREAT EPILOGUE

July 28-29, 2016 3

2016 RETREAT EVALUATION

Excellent Good Fair Poor

Facilities 16 10 0 0

Relevance 14 13 0 0

Time of Year 11 15 1 0

Overall 15 10 2 0

Too Short Just

Right Too

Long Retreat Length 1 25 1

4

Excellent

Good

Fair

Poor

Facilities

16

10

0

0

Relevance

14

13

0

0

Time of Year

11

15

1

0

Overall

15

10

2

0

Too Short

Just Right

Too Long

Retreat Length

1

25

1

SUGGESTIONS FOR IMPROVEMENT

• Comment section for each presentation on evaluation form

• Slides are unreadable – too small • Double side binders or go green! • Topics were good and moved quickly • Heather should have presented on Thursday; more attendees • Use microphones • Install portable heaters • More examples of “real’ scenarios • Please no more breakout groups • Coverage presentation useless, could not read slides 5

LIKES AND DISLIKES LIKED MOST

• New topics – Cyber, EJIF info • The speakers • Debby, Miola, DeWeese, & Verry presentations • Debby was an eye opener • DeWeese is the greatest resource the JIF has • Debby keeping us on our toes! • Speakers and their ability to speak freely • Stump the Solicitor and Cyber • Add ½ hour at breakfast & lunch for yoga meditation • Venue & topics

6

LIKES AND DISLIKES LIKED LEAST

• Too cold! • Analytical data • Pietras – dry & slow • Pietras session too long • All the preaching to the choir • Slides & handouts too small & not clear • WC claims confusing due to a lack of knowledge of the law • Pivot Point presentation – could not read results • Some sessions too long, incorporate more activities; i.e. golf • Heather’s line graphs difficult to read • Some presenters talk to AJG not audience • Fonts on slides too light • EJIF presentation while valuable was boring 7

FUTURE TOPICS

• Enough JIF history, more TODAY topics • Acronyms cheat sheet • Handling behavior problems • DeWeese in an open forum • Apply for CEU credits • Importance of documentation • Continued updates from Pivot Point • More HR topics; employee issues; Title 59 • More quick breaks to stand & stretch 8

BEST IDEAS • IT (Cyber) session • Governing Body staying out of Land

Use matters • Not to sit too long • EPL Updates – due 10/1 • Taking time to exercise • Keeping vehicle maintenance records • Cyber security & documentation • Annual review of license fee calculations &

denials reviewed by Solicitor • Underground tank info • EJIF info 9

1991-2017 10

EARLY YEARS 1991 – 1995: GETTING ORGANIZED

• Monthly Executive Committee Meetings • Establish Working Committees • Create Safety Programs

– Safety Coordinators – Safety Committees – Safety Incentive Program

• Develop & Implement Risk Management Programs – Roadway, sign & walkway

11

GROWING YEARS 1995 – 2013: DEFINING OURSELVES

• Growth Years • Policies & Procedures

– Assessment allocation strategy – Dividend release

• Added Benefits – Appraisals – EPL Hotline

• Website • Retreats • More Focused Programs

– Safety – Claims Management – Risk Management

12

MATURING YEARS 2013 - PRESENT

• How much surplus? • Coverage enhancements • Competition • Member enhancements

–Exigis –Wellness

• Fine tuning

13

25 Years of Accomplishments

14

WE HAVE A LOT TO BE PROUD OF…

15

16

81.70%

62.70% 61.10% 62.10% 73.60%

62.40%

0%

25%

50%

75%

100%

2011 2012 2013 2014 2015 2016

Six Year Average Loss Ratio of 67.2%!

MEL LOSS RATIO RESULTS (VALUED AS OF 3-31-2017)

17

13.00%

113.60%

11.00%

71.20%

22.40%

0.00% 0%

25%

50%

75%

100%

125%

150%

2011 2012 2013 2014 2015 2016

Six Year Average Loss Ratio of 35.7%!

18

13.10% 20.70%

31.50%

75.50% 68.70%

57.70%

0%

25%

50%

75%

100%

2011 2012 2013 2014 2015 2016

Six Year Average Loss Ratio of 46.7!

54%

16%

28%

5% Loss Funding

Operations

Excess

RMC's

19

19

2010 JIF BUDGET

44%

12%

36%

4% Loss Funding

Operations

Excess

RMC's

20

20

2017 JIF BUDGET

Lower operational costs in relation to budget

LOSS FUNDS: 2010 VS 2017

$6,670,966 $6,090,074

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

2010 *2017

9.13% Reduction

21

*Includes the addition of Elsinboro & Vineland 21

2.97% 3.25%

1.97% 2.05%

-0.02%

-1.19% -2%

0%

2%

4%

6%

8%

10%

2011 2012 2013 2014 2015 2016* 2017

STEADY BUDGETS

Low single digits over 7 Years! *$50K Increase in Property SIR

22

1,780

1,339

1,691

147

466

780

1927 1805

2471

0

500

1,000

1,500

2,000

2,500

2014 2015 2016

Instructor Online Total

EMPLOYEES TRAINED Instructor Led vs. Online Training

Participation is increasing! 23

A STRONG BOTTOM LINE HISTORICAL OPERATING RESULTS 1991 TO 3/31/2017

24

Earned Contributions & MEL / RCF Dividends $202,255,462 Claims Paid (Net of Subrogation) (67,060,199) Excess Recoveries 211,230 Excess Insurance Premiums Paid (52,732,976) Operating Expenses Paid (36,404,481) Residual Claims Fund Transfer Premiums (12,644,301) Total Payments (168,630,728) Position After Expenses 33,624,735 Investment Income (per Treasurer) 8,358,037 Transfers Return of Surplus (13,589,742) Cash Position $28,393,029 Case Reserves (5,861,844) Position After Case Reserves 22,531,185 IBNR Reserves (3,002,849) Net Current Surplus/(Deficit) $19,527,999

$11,746,790

$15,120,942 $16,926,580

$18,214,719 $18,834,643

$0$2,000,000$4,000,000$6,000,000$8,000,000

$10,000,000$12,000,000$14,000,000$16,000,000$18,000,000$20,000,000

2012 2013 2014 2015 2016

GROWING SURPLUS

62.4% Growth in Surplus in 5 years! 25

$750,000 $750,000 $750,000 $825,000

$1,125,000 $1,250,000

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

2011 2012 2013 2014 2015 2016

GROWING DIVIDENDS

26 60% Growth in Dividends in 5 years!

12%

4%

22%

60%

PropertyAutoLiabilityWC

27

Workers Compensation

dominates the JIF Loss Funding Budget

HOW DO WE COMPARE?

80.30%

92.80%

49.30%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Atlantic BURLCO TRICO

AtlanticBURLCOTRICO

28

WHERE CAN WE IMPROVE? (Percentage of Transitional Duty Days used as of 5/31/17)

51.02%

63.00%

75.60%

58.40%

74.10% 62.80%

56.40% 49.30%

0.00%

25.00%

50.00%

75.00%

100.00%

2010 2011 2012 2013 2014 2015 2016 2017*

TRANSITIONAL DUTY DAYS

Lost Opportunity Days cost money! * Through 5/31/2017 29

29

1.88 1.59

1.90 2.05

2.37 2.18 2.28 2.14

2.39 2.35

2.03 1.49

0

1

2

3

4

2012 2013 2014 2015 2016 2017

TRICO JIF NJ MEL

LTAF RESULTS

Lost Opportunity Days negatively impact the Fund’s LTAF rate

(Valued as of April 30, 2017)

30

AFTER ALL IS SAID AND DONE

THE JIF REMAINS A SUCCESS

31

BUT WITH MATURITY

32

COMES NEW CHALLENGES

NEW CHALLENGES

33

• Engaging Decision Makers: – Understanding the value of the JIF – Insurance is not a “Commodity” – A “JIF” is not a “JIF” – Overcoming price objections

NEW CHALLENGES

34

• Member Engagement: – Fund Commissioner turnover – Elected Officials turnover – Safety & Claims Coordinators

Turnover in these positions creates disconnect

NEW CHALLENGES

35

• Generation Next: – Young people don’t understand/care why the

JIF was formed – Don’t understand/care about the JIF value

proposition

NEW CHALLENGES

36

• Relevance: – Are we meeting member needs? – Do we adapt to changing demands?

NEW CHALLENGES

37

• Member Participation: – Member involvement is important – The JIF is not on autopilot – Do members get involved? Meeting attendance Committee participation Safety and Risk Management Wellness

NEW CHALLENGES

38

• Complacency: – Continued success

breeds complacency – How do we keep the JIF

message fresh?

NEW CHALLENGES

39

• Communication: – Fund Commissioners are busy people – The Fund must be efficient & relevant in its

communication with members

NEW CHALLENGES

40

• Technology: – Automating existing functions to

meet today’s demands – Claims – Exposure data – RMIS – Meeting via Adobe Connect

NEW CHALLENGES

41

• Finances: – How much surplus is enough? – Some Elected Officials are starting

to question the amount of surplus the JIF carries

NEW CHALLENGES

42

• Surplus Options Under Consideration: – Create an AELCF for each member – Fund the MEL Retrospective Program – Offset Loss Funding Budget

NEW CHALLENGES

43

• Addressing New Exposures: – Cyber ₋ Training ₋ Policy development

– Drones – Land Use ₋ RLUIPA (Religious Land Use and Institutionalized Persons Act)

NEW CHALLENGES

44

• RMC Fees: – RMC fees as a percentage of the JIF

budget dropped from 5.64% in 2002 to 3.75% in 2016

– Many RMC’s are not compensated fairly for the services they provide

– RMC’s can receive a higher fee if they place members in competing JIFs

NEW CHALLENGES

45

• Competition: – TRICO JIF members have strong safety & risk

management programs in place – Makes members attractive to competing JIFs

AS GOOD AS THE JIF HAS BEEN…

It Must Continue to Evolve

46

THIS MORNING’S AGENDA I. Welcome – Opening Remarks (Paul Miola) • 2016 Epilogue • State of the Fund • Current Financials • Retreat Overview II. Identifying Technology Risks (John Verry) • What did we learn from member assessments? • Most common deficiencies noted across membership • Reading & understanding my report • Where do I begin?

47

THIS MORNING'S AGENDA (CONTINUED)

III. Controlling Technology Risks – (Paul Miola & Ed Cooney)

• Resources available from cyber liability insurers • Development of model policies & procedures • Vendor insurance requirements • Employee training

48

Morning Break

THIS MORNING'S AGENDA (CONTINUED)

IV. I’ve Been Hacked: Now What? (Paul Miola & Jeff Hatcher)

• Who do I call? – (Qual-Lynx/Breach Hotline) • What are my statutory obligations? • Incident response program/vendor

V. EPL/POL Program Updates (Heather Steinmiller) • Statewide results & trends • How is the TRICO JIF performing? • POL - Latest claims trends

- Land Use claims - Recent coverage changes - RLUIPA Claims • JIF/MEL Resources

– Elected Officials training – Land Use Board member training

• EPL – Latest claims trends & dealing with difficult employees

49 Lunch!

AFTERNOON AGENDA VI. The JIF Wellness Program (Debby Schiffer)

• Program Status • The Joy of Movement

• Why people aren’t moving & what gets them going • How do people perceive exercise & can we change the

perception • The impact of not moving & sitting too much

VII. Spoliation of Evidence (David DeWeese) • What is evidence spoilage? • How can it impact the defense of a claim? • What are my requirements to preserve evidence?

50

Afternoon Break

AFTERNOON AGENDA (CONTINUED)

VIII. JIF SIP – Time for a change? (Maureen Abdil & Paul Miola)

• Purpose • How has the Program evolved? • Is the SIP criterion still relevant? • Incentivize vs. penalize • Breakout Groups

July Executive Committee Meeting

4:00pm 51

FRIDAY MORNING’S AGENDA

IX. MEL Update (Dave Grubb) • MEL RCF Financials • Current MEL Initiatives

– RMC Accreditation – Marketing – Investment Legislation

• Upcoming Challenges

52

FRIDAY MORNING’S AGENDA (CONTINUED)

X. Transitional Duty (Paul Miola & Karen Beatty) • Recent trends • Why do some members embrace & others not? • What are the roadblocks to using transitional duty?

– Second Effort program

• Does not using transitional duty really impact my WC claim costs? – Indemnity & PPD costs

• Dealing with difficult employees – frequent fliers • Breakout Groups

53

FRIDAY MORNING'S AGENDA (CONTINUED)

54

XI. FAQ’s (Paul Miola & Paul Forlenza) – Who is covered and when? – What is covered and when?

Slide Number 1Housekeeping2016 Retreat Epilogue2016 Retreat EvaluationSuggestions for ImprovementLikes and DislikesLikes and DislikesFuture TopicsBest IdeasSlide Number 10Early Years�1991 – 1995: Getting OrganizedGrowing Years�1995 – 2013: Defining OurselvesMaturing Years�2013 - PresentSlide Number 14Slide Number 15JIF Loss ratio results�(Valued as of 3-31-2017)Mel loss ratio results�(Valued as of 3-31-2017)EPL LOSS RATIO RESULTS�(Valued as of 3/31/2017)Slide Number 19Slide Number 20Loss Funds: 2010 vs 2017Slide Number 22Slide Number 23A Strong Bottom Line�Historical Operating Results 1991 to 3/31/2017Slide Number 25Slide Number 26CONSISTENT Cost Driver�Workers CompensationHow Do We Compare?Slide Number 29Slide Number 30Slide Number 31Slide Number 32Slide Number 33Slide Number 34Slide Number 35Slide Number 36Slide Number 37Slide Number 38Slide Number 39Slide Number 40Slide Number 41Slide Number 42Slide Number 43Slide Number 44Slide Number 45Slide Number 46This Morning’s AgendaThis Morning's Agenda �(continued)This Morning's Agenda �(continued)Afternoon Agenda �Afternoon Agenda �(continued)Friday Morning’s AgendaFriday Morning’s Agenda (continued)Friday Morning's Agenda (continued)