Starr June 23 Quarterly Plain English Report - RFQ.pdf
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- Attached to
- DBA Insurance Rate Agreement
- Solicitation number
- 19AQMM26Q0155
About this file
This is a quarterly plain English report on the Defense Base Act (DBA) Program under USAID Contract 7200AA22C00029, submitted by Starr Indemnity & Liability Company.
Starr was awarded the contract effective May 16, 2022, with the first policy binding on June 3, 2022. As of June 30, 2023, the program encompasses 337 policies (18 renewal policies) for the April–June 2023 quarter, generating $1,026,540 in premium revenue. For the full year 2023, 665 unique policies produced $3,634,952 in total premiums. Starr issued $21,383 in premium refunds across 24 policies. The program has generated 34 total claims with incurred losses of $815,664. The largest claimant by frequency reported 13 claims totaling $193,078 incurred (10 open, 3 closed), including fire, COVID-19, earthquake-related death, and vehicle injury claims. Another claimant reported 5 claims totaling $317,726 incurred—the highest severity—with four claims stemming from a single critical vehicle accident in Mozambique involving four injured employees. Remaining claims include fractures, contusions, heart attacks, concussions, sprains, and COVID-19 cases. The current loss ratio stands at 12.08% as of June 30, 2023. A rate decrease would apply in Option Period 1 (effective February 16, 2025) if the total loss ratio remains below 32%, excluding war hazard losses. No war hazard claims have been reported to date. The report includes detailed definitions of industry terms relevant to DBA insurance administration.
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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 began on June 3rd, 2022. Between April 1st 2023 and June 30th 2023, there are 337 policies (18 renewal policies) under the USAID program. Please see Attachment 1 - Quarterly Premium Report for more detail. Premium associated with these policies total to
$1,026,540. For the year of 2023, we have 665 unique policies with premiums totaled at
$3,634,952. Attachment 3 – Quarterly Premium Report by contractor further breaks down the information by partner. Starr refunded $21,383 in premium encompassing 24 separate policies. Details for each policy can be found in Attachment 4 – Quarterly Premium Refund Report. As of June 30th, 2023, Starr has received 34 claims under this program. Currently the total incurred for all losses is $815,664. Further detail can be found in Attachment 2 - Loss Experience Report.
B. Claims Reported – As of June 30th, 2023, we have a total of 34 claims with a total incurred of $815,664. XXXXX has the highest number of claims with us currently at 13 claims, $193,078 total incurred. They currently have 10 claims open and three 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. QQQQQ has 5 claims with us currently, totaling at $317,726 incurred – the highest in severity compared to other clients. 4 of their 5 claims are all related to one occurrence; a critical vehicle accident leaving 4 employees injured in Mozambique. The rest of the claims currently on our 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.
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 (IBNR) losses.
Insured – The person or organization covered by an insurance policy.
SBU - CONTRACTING AND ACQUISITIONS
399 Park Avenue / New York / New York 10022 / 646.227.6300
STARRCOMPANIES.COM
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 June 30th, 2023: 12.08%
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).
E. Number of War Hazard Claims: 0
SBU - CONTRACTING AND ACQUISITIONS
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