Starr Dec 23 Quarterly Plain English Report - RFQ.pdf

399 Park Avenue / New York / New York 10022 / 646.227.6300

STARRCOMPANIES.COM

DEFENSE BASE ACT PROGRAM

USAID CONTRACT 7200AA22C00029

Quarterly Plain English Report

A. Summary – Beginning May 16th, 2022, Starr Indemnity & Liability Company (Starr) was awarded contract 7200AA22C0029. The first policy bound under this program on June

3rd, 2022. Between October 1st 2023 and December 31st 2023, Starr issued 369 policies under the USAID program. Please see Attachment 1 - Quarterly Premium Report for more details. The premium associated with these policies total $1,602,798. For calendar year 2023, we have 948 new and renewal policies totaling $6,720,445 in premium.

Attachment 3 – Quarterly Premium Report by contractor further breaks down the information by partner. The first quarter of FY24, yielded total premiums of $1,602,798.

Starr refunded $159,707 in premium encompassing 66 separate policies. A few wires are currently pending as our program administrator is waiting on confirmation of audit details.

Specific refund details for each policy can be found in Attachment 4 – Quarterly

Premium Refund Report.

B. Claims Reported – As of December 31st, 2023, Starr received 44 claims with a total incurred of $1,093,256, including war hazard losses. Excluding war hazard, the total incurred sits at 1,049,796. XXXXXXX has the largest frequency of losses with 13 claims, yielding $207,975 in total incurred. They currently have 4 open claims and 9 closed.

These claims include a fire breaking out in XXXXXX Control Room, COVID cases, a death due to an earthquake, and a fracture from riding in a vehicle. QQQQQQ has seven claims with us currently, totaling $275,194 incurred – the highest in severity compared to other clients. Four of their five claims are all related to one occurrence; a critical vehicle accident leaving four employees injured in Mozambique. We also currently have one War Hazard claim now which involved the on-going tensions between Israel/

Gaza. A claimant and his family have been killed by an airstrike. Total incurred currently sits at $43,460. The remaining losses under the USAID program from other insureds include fractures, contusions/bruises, heart attacks, concussions, sprains, and

COVID-19. More details of these claims including whether they are opened, closed, and total incurred per claim can be found in our report labeled Attachment 2 - Loss

Experience Report.

C. Industry Terms

Adjuster (Resolution Manager) – An individual employed by an insurer (or a third-party administrator) to evaluate losses and settle policyholder claims.

Claim – A policyholder's request for reimbursement from an insurance company for a loss.

Claimant – A person who makes an insurance claim.

Death benefit – Amount paid to the beneficiary upon the death of the insured.

SBU - CONTRACTING AND ACQUISITIONS

399 Park Avenue / New York / New York 10022 / 646.227.6300

STARRCOMPANIES.COM

Incurred Losses – the total amount of paid claims and loss reserves associated with a particular time period, usually a policy year. May not include incurred but not reported losses.

Insured – The person or organization covered by an insurance policy.

Insurer – The insurance company

Loss – The amount an insurance company pays on a claim.

Loss history – Refers to the number of insurance claims previously filed by a policyholder.

A company will consider loss history when underwriting a new policy or considering a renewal of an existing policy. Companies view loss history as an indication of the likelihood that an insured will file a claim in the future.

Loss Ratio — proportionate relationship of incurred losses to earned premiums expressed as a percentage (total incurred divided by earned premium).

Policy period – The period a policy is in force, from the beginning or effective date to the expiration date.

Premium – The amount paid by an insured to an insurance company to obtain or maintain an insurance policy.

Return premium – A portion of the premium returned to a policy owner because of cancelation, rate adjustment, or a calculation that an advance premium was in excess of the actual premium.

Third–party administrator (TPA) – An organization that performs managerial and clerical functions related to an employee benefit insurance plan by an individual or committee that is not an original party to the benefit plan.

War–Hazard Claim – The U.S. government will reimburse the insurance company when it pays compensation for DBA-covered injuries caused by war hazards. If a “war-risk hazard” caused an injury to an eligible employee, then the War Hazards Compensation Act applies.

D. Current Loss Ratio as of December 31st, 2023 (excluding any War Hazard Claims):

10.08%

a. Rate decrease would apply in Option Period 1 if, as of February 16, 2025, total loss ratio for the program is under 32% (excluding any losses reimbursable through the War Hazard Compensation Act).

b. As a note, War Hazard claims are excluded from our total loss ratio given that we are reimbursed for those losses.

E. Number of War Hazard Claims: 1

SBU - CONTRACTING AND ACQUISITIONS