Starr Dec 24 - Quarterly Plain English Report - RFQ.pdf
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- DBA Insurance Rate Agreement
- Solicitation number
- 19AQMM26Q0155
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This is a Quarterly Plain English Report for the Defense Base Act Program under USAID Contract 7200AA22C00029, submitted by Starr Indemnity & Liability Company.
Starr was awarded the contract effective May 16, 2022, with the first policy bound on June 3, 2022. During the fourth quarter of 2024 (October 1 – December 31), Starr issued 293 new and renewal policies totaling $1,342,624 in premiums, while processing $248,356 in refunds across 156 policies. As of December 31, 2024, the program has generated 121 total claims with $2,887,189 in total incurred losses, including war hazard claims. Excluding war hazard losses, the program shows 116 claims with $2,538,054 incurred. The current loss ratio stands at 16.68% (excluding war hazard claims), which positions the program for a potential rate decrease in Option Period 1 if the total loss ratio remains below 32% as of February 16, 2025. Five war hazard claims have been reported, totaling $303,839 in incurred losses, stemming from conflicts in Israel/Gaza and Afghanistan. The report identifies two contractors with the highest claims activity: one with 26 claims totaling $339,732, and another with 25 claims totaling $567,140.58, the latter driven largely by a single critical vehicle accident in Mozambique involving four injured employees. The report includes supporting attachments detailing quarterly premiums, loss experience, claims by contractor, and refund details.
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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 2024 and December 31st 2024, Starr issued 293 new and renewal policies under the USAID program. Please see Attachment 1 - Quarterly
Premium Report for more details. The premium associated with these policies total
$1,342,624. Attachment 3 – Quarterly Premium Report by Contractor further breaks down the information by partner. Starr refunded $248,356 in premium encompassing 156 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, 2024, Starr received 121 claims with a total incurred of $2,887,189, including war hazard losses. Excluding war hazard, the total incurred is currently $2,538,054 and 116 claims. XXXXXXX continues to have the largest frequency of losses with 26 claims, yielding $339,732 in total incurred. They currently have 6 open claims and 20 closed. These claims include a fire breaking out in
XXXXXXXX Control Room, COVID cases, a death due to an earthquake, and a fracture from riding in a vehicle. QQQQQQ has 25 claims currently, totaling
$567,140.58 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 is currently $49,588. Three other WHCA claims stem from Afghanistan where claimants allege mental anguish caused by enemy attacks. These claims sit at a total of $254,251. 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, 2024 (excluding any War Hazard Claims):
16.68%
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: 5
SBU - CONTRACTING AND ACQUISITIONS
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