Starr Sep 23 Quarterly Plain English Report - RFQ.pdf
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- DBA Insurance Rate Agreement
- Solicitation number
- 19AQMM26Q0155
About this file
This is a Quarterly Plain English Report submitted by Starr Indemnity & Liability Company under USAID Contract 7200AA22C00029 for the Defense Base Act (DBA) Program, covering the period from July 1 through September 30, 2023.
Starr was awarded the contract on May 16, 2022, with the first policy effective June 3, 2022. As of September 30, 2023, the program encompasses 245 active policies (including 112 renewal policies) with quarterly premiums totaling $2,057,605. For the full 2023 calendar year, 713 new and renewal policies generated $5,264,430 in premiums, and the fiscal year 2023 total premiums reached $6,429,257. Starr issued premium refunds of $127,315 across 36 separate policies during the reporting period. The program has experienced 36 total claims with incurred losses of $975,713 as of the report date. Two contractors account for the largest claims activity: one contractor with 13 claims totaling $207,975 incurred (10 open, 3 closed) and another with 5 claims totaling $305,872 incurred, including a critical vehicle accident in Mozambique involving four injured employees. Remaining claims involve fractures, contusions, heart attacks, concussions, sprains, and COVID-19 cases. The current loss ratio as of June 30, 2023, is 12.08%, well below the 32% threshold that would trigger a rate decrease in Option Period 1 if maintained through February 16, 2025. No War Hazard Claims have been filed under this program.
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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 July 1st 2023 and September 30th 2023, there are 245 policies (112 renewal policies) under the USAID program. Please see Attachment 1 - Quarterly Premium Report for more details. Premium associated with these policies total to
$2,057,605. For the current year of 2023, we have 713 new and renewal policies with premiums totaled at $5,264,430. Attachment 3 – Quarterly Premium Report by contractor further breaks down the information by partner. For FY23, total premiums are at
$6,429,257. Starr refunded $127,315 in premium encompassing 36 separate policies.
Details for each policy can be found in Attachment 4 – Quarterly Premium Refund Report. As of September 30th, 2023, Starr has received 36 claims under this program.
Currently the total incurred for all losses is $975,713. Further detail can be found in Attachment 2 - Loss Experience Report.
B. Claims Reported – As of September 30th, 2023, we have a total of 36 claims with a total incurred of $975,713. XXXXXXXX has the highest number of claims with us currently at
13 claims, yielding $207,975 total incurred. They currently have 10 open claims and three closed. These claims include a fire breaking out in XXXXX Control Room, COVID cases, a death due to an earthquake, and a fracture from riding in a vehicle.
QQQQQQQ has five claims with us currently, totaling $305,872 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. 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 losses.
SBU - CONTRACTING AND ACQUISITIONS
399 Park Avenue / New York / New York 10022 / 646.227.6300
STARRCOMPANIES.COM
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 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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