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Alliance for Liability and Property Services

ALPS Property/Casualty Overview

A.L.P.S.

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Goal:Have control over costs

Manage how to stabilize costs

Group purchasing concept – designed for and

owned by district

Board of Directors:Decision making group on insurance/operations

Decision making group on membership

Decision making group on surplus funds

Schools in ConsiderationStillwater

Rosemount-Apple Valley-Eagan

Minnetonka

Hopkins

Eden Prairie

Edina

Wayzata

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Charter Member Statistical InformationCharter Member Districts 2014 - 2015

Districts 4

Students 53,378

Vehicles

- Buses 209

- Other 132

- Total Vehicles 341

Total Insured Values

(Includes all property values,

and auto values)$1,852,131,015

Note: Information displayed includes the following ALPS potential charter members:

School District

ISD #834 - Stillwater

ISD #196 - Rosemount

ISD #276 Minnetonka

ISD #270 - Hopkins

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Spectrum of Insurance

ConventionalInsuranceProgram

Safety DividendProgram

LargeDeductibleRetro-Plan

ProtectedSelf-

Insurance(AggregateProtection)

Specific Excess

Insurance(No

Aggregate)

Rent-A-Captive

Captive or RRG

Less Control Greater Control

Pure Self-Insurance

ALPS

Insurance CompanyDriven Alternatives Insured Driven Alternatives

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LOSS FUND

$75,000 SIR Per Occurrence

Brit Ins Co.

(Lloyds of London)

$1,000,000 Per Occurrence

Hartford Insurance Company

Excess Property $500,000,000 Per Occ.

(1)

$15,000,000 Earthquake Sublimit

Per Occ/Agg. (2)

$15,000,000 Flood Sublimit

Per Occ/Agg. (3)

LOSS FUND

$460,000

Pools Annual Aggregate Contribution Required

(Funding amount required by each district is based on actuarial calculations by carrier - based on

exposures and losses)

Brit Ins Co.

(Lloyds of London)

$2,000,000

Aggregate Protection Excess of the Loss Fund

LOSS FUND

$75,000 SIR Per Occurrence

Brit Ins Co.(Lloyds of London)

\$2,000,000 Per Occurrence

$4,000,000 Per Districtt Annual Aggregate

Genesis Insurance Co.$2,000,000

Per Occ./Aggregate

Per District

LOSS FUND

$50,000 SIR Per Occurrence

Brit Ins Co. (Lloyds of London)

$1,000,000 Crime (4)

Sample Program Structure – Property/Casualty*

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Benefits:

Retain a portion of the predictable losses;

Transfer a portion of the catastrophic risk;

Broaden your insurance program coverages;

Control your costs in the hard market;

Budget a known maximum cost; and

Input in the claims process.

Risks:

Three year commitment (declared by State of Minnesota);

Potential for double coverage the first quarter.

Benefits and Risks of Protected Self-Insurance & Cooperative Purchasing

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Alliance for Liability and Property Services (ALPS) 2014-2015 PROPERTY/CASUALTY PROGRAM COST COMPARISON – FINAL PRICING District: Independent School District #834 (Stillwater, MN)

Fixed Costs 2013-2014 2014-2015 2014-2015Expiring Maximum MaximumPremiums Proposed Expected

• Package (Property, General, Auto, Crime, Physical Damage) $235,315 $44,813 $44,813

• Excess Property Included $49,913 $49,913

• Boiler & Machinery Included $6,689 $6,689

• Excess Liability Included $3,916 $3,916

• Arthur J. Gallagher Risk Management Services Fee Included $20,779 $20,779

• Gallagher Bassett Services Claims Administration Fee Included $10,000 $10,000

• Gallagher Bassett Services Loss Control Fee Included $1,000 $1,000

• Total Fixed Costs $235,315 $137,110 $137,110

• Percent of Change Not Applicable -41.7% -41.7%

Variable Costs 2013-2014 2014-2015 2014-2015Expiring Maximum MaximumPremiums Proposed Expected

Loss Fund – Package Not Applicable $83,346 $69,110

Total Program Contribution on a Maximum Cost Basis $235,315 $220,456 $206,220

Percent of Change Not Applicable -6.3% -12.4%

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Questions?