Safety, Health, Environment & Risk Management

UTHSC-H Risk Finance Summary for

Workforce & Property Exposures

April 29, 20111

Annual Employee Census

01,0002,0003,0004,0005,000

2003 2004 2005 2006 2007 2008 2009 2010

Fiscal Year

UTHSC-H Employee Injury Reports and Workers’ Compensation Insurance Premium Trends, FY03 to FY10

Note: premium calculation based on employee payroll(30%), and injury frequency(20%) and severity(50%)

Total Number of First Reports of Injury and Subset of Compensible Claims Submitted to UT System

0

200

400

600

2003 2004 2005 2006 2007 2008 2009 2010

Fiscal Year

Oversight by SHERM

Annual Employee Payroll in Thousands of Dollars

$0$100,000$200,000

$300,000$400,000$500,000

2003 2004 2005 2006 2007 2008 2009 2010

Fiscal Year

Annual Policy Premium

$0$200,000$400,000

$600,000$800,000

$1,000,000

2003 2004 2005 2006 2007 2008 2009 2010

Fiscal Year

185 fewer reported injuries compared to FY03

Medical claim costs reduced $112,543 compared to FY03

2

Resource Allocation Program Rebates

$0$100,000$200,000

$300,000$400,000$500,000

2003 2004 2005 2006 2007 2008 2009 2010

Fiscal Year

$262,000 reduction in RAP funding in FY10 as compared to peak in FY07

3

Annual Residents Census

0200400

600800

1,000

2003 2004 2005 2006 2007 2008 2009 2010

Fiscal Year

UTHSC-H Residents’ Injury Reports and Workers’ Compensation Insurance Premium Trends, FY03 to 10

Note: insurance premium influenced predominantly by market conditions, employee census, employee payroll, and injury frequency and severity

Annual Residents Payroll in Thousands of Dollars

$0$10,000$20,000

$30,000$40,000$50,000

2003 2004 2005 2006 2007 2008 2009 2010

Fiscal Year

Annual Policy Premium

$0$50,000

$100,000$150,000$200,000$250,000$300,000

2003 2004 2005 2006 2007 2008 2009 2010

Fiscal Year

Total Number of First Reports of Injury and Subset of Compensible Claims Submitted to Insurer

0100200

300400

2003 2004 2005 2006 2007 2008 2009 2010

Fiscal Year

Oversight by SHERM

4

Texas Mutual Dividend Payments

$0

$20,000

$40,000

$60,000

$80,000

2003 2004 2005 2006 2007 2008 2009 2010

Fiscal Year

Total of $238,131 in dividend payments since 2006

5

Workers’ Compensation Insurance Premium Adjustment for UTS Health Components Fiscal Years 2003 to 2010

(discount premium rating as compared to a baseline of 1, three year rolling average adjusts rates for subsequent year)

2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

UT HSC Tyler (0.09)

UT Medical Branch Galveston (0.16)UT HSC San Antonio (0.12)

UT Southwestern Dallas (0.17)

UT HSC Houston (0.09)UT MD Anderson Cancer Center (0.05)

Oversight by SHERM

6

2005 2006 2007 2008 2009 2010 2011$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

UTHSC-H Comprehensive Property Protection Program (CPPP) Insurance Premiums2005-2011

Year of Coverage

Named WindstormPremium

Fire and all other perils premium

Pre

miu

m

7

2011 CPPP Structure - Fire and All Other Perils

$1 billion

$5 million

Fire & All Other Perils

(Excluding Named Windstorm)Commercial Insurance Policy

$850m Layer

50% Inst. With Loss

50% All Institutions

$250,000

Institution Deductible $250k

Fire & All Other Perils (Excluding Named Windstorm)Commercial Insurance Policy

75% of $150m Layer50% Inst. w/Loss

$150 million

50% All Institutions

UT Share 25% of $150m Layer

8

2011 CPPP Structure - Named Windstorm

$50 million

$250,000

NFIP & TWIA policies

Interim Financing60%Fund

Interim Financing40%InstitutionWith Loss

Named WindstormCommercial Insurance Policy

75% of $150m Layer

Institution Deductible $250k

$200 million

Interim Financing

40% Institution with Loss

Interim Financing 60% Fund

UT Share 25% of $150m Layer

9

Loss Scenarios – Insurance Carrier Payouts

Policy Deductibles: $100,000 Equipment Breakdown; $5M Fire and AOP; $50M NWS (Galveston and TMC)

All payouts shown are excess of applicable policy deductibles.

UT’s 25% pro-rata share portions will be financed through CPPP Fund or debt issuance.

All financing through CPPP Fund or debt issuance will be replenished via 50/50 (Fire and AOP) or 40/60 (NWS).

  

 

Carrier Payout UTHealth Payout Carrier Payout UTHealth Payout

$2.5M Boiler Loss (BBS SP) $2,400,000 $100,000 $1,800,000 $419,200

$150M Fire Loss (UTPB) $145,000,000 $2,910,000 $116,000,000 $22,062,000

$200M NWS Loss (MSB) $100,000,000 $112,500,000 $43,875,000

New StructureLoss Scenario

Old Structure

10

FY10 Property Losses

Retained Losses

• Water damage NSH $10,000• Water damage SON $35,000• Water damage NSH $1000• Water damage UCT $1000• Water damage SRB $20,000• Water damage NSH $7,000• Water damage UCT $1000• Water damage SON $500• Water damage SON $600• Water damage MSB $2000• Water damage UCT $500• Water damage MSB $1000• Hurricane damage RAHC $4000• Various thefts (87) $17,400• Total Retained Losses $85,200

Losses incurred by but covered by third party N/A

Losses incurred and covered by insurance N/A

Retained Property Loss Summary By Peril(Total FY10 losses by cause and amount in dollars,

Total Loss~$85,200)

Theft

Water

Hurricane

11

UTHSC-H CPPP Premium Allocation Model Score vs. UTS Average

2007 2008 2009 201060.00

62.00

64.00

66.00

68.00

70.00

72.00

74.00

UTS Average

UT HSC Houston

*A premium credit is provided for scores in excess of 70.00

*

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Other Policies

Equipment Floater

 Rate*

(per $100 of insured value) Total Insured Value Annual Premium

FY03 $0.42 $4,600,788 $19,390

FY04 $0.49 $3,083,582 $15,204

FY05 $0.42 $4,017,404 $16,870

FY06 $0.46 $3,581,709 $16,476

FY07 $0.54 $3,983,875 $23,414

FY08 $0.54 $3,487,380 $19,782

FY09 $0.54 $5,118,381 $26,949

FY10 $0.54 $4,890,127 $26,670

Fleet Insurance (n=79 vehicles)

  Liability Comprehensive/Collision Losses Premium

FY03 $189 $334 $96,052 $43,322

FY04 $169 $349 $2,610 $37,508

FY05 $234 $434 $20,074 $40,443

FY06 $230 $412 $905 $38,202

FY07 $230 $418 $846 $42,234

FY08 $252 $459 $6,518 $37,181

FY09 $216 $322 $19,791 $38,178

FY10 $212 $274 $10,552 $33,471

*Not Inclusive of administrative processing fee of $0.46

13

Other Policies

Fine Arts

  Limit Based Premium Losses Annual Premium

FY05 $500,000 $0 $2,689

FY06 $500,000 $0 $200

FY07 $500,000 $0 $215

FY08 $500,000 $0 $906

FY09 $500,000 $0 $906

FY10 $500,000 $0 $906

Endowment Policy (Property and Liability)

  Total Insured Value Losses Annual Premium

FY05 $5,462 $0 $3,177

FY06 $0 $0 $0

FY07 $53,254 $0 $2,746

FY08 $53,254 $0 $7,129

FY09 $102,942 $0 $14,220

FY10 $102,942 $0 $10,549

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Total Cost of Risk TransferWorkforce & Property

Insurance Policy FY09 Paid FY10 Estimated or Paid Change Net Change

Employee Workers Comp $ 335,710 $ 338,682 1% $2,972

Resident Workers Comp $ 170,461 $162,305 -5% -$8,156

Fine Arts $ 1,000 $ 1,000 0% $0

Auto $ 38,178 $ 33,471 -12% -$4,707

CPPP Fire & AOP Premium $ 256,234 $ 247,174 -4% -$9,060

CPPP Named Windstorm $ 1,078,439 $ 1,088,281 1% $9,842

Mobile Diagnostic Equipment $ 5,566 $ 5,566 0% $0

Equipment Policy $ 26,950 $ 26,670 0% $280

Policy Premium Total $1,912,538 $ 1,903,149 -1% -$9,389

15

Discussion Items1. CPPP premium reduced 5.39% with a UTS increased exposure of

25% of the $5M -$150M portion of any fire and AOP loss and a 25% increased exposure of the $50M-$200M portion of any named windstorm loss.

2. Next years premium likely to see a significant increase due to change in CAT model based on Hurricane Ike losses

3. For a variety of reasons there is a significant decline in retained losses-some due to our efforts, some due to chance.

4. Despite continual reductions in WCI losses and premium, rebate amounts continue to diminish. This is due to effort to reduce the WCI fund down to the designated capitalization target amount. This will eventually lead to the need for other sources of funding for the Employee Health Services program.

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Medica

l Malp

racti

ce

*Pro

perty

Unemplo

ymen

t Ins.

Employe

e WC

Reside

nt W

CD&O

Fleet

Equipm

ent F

loater

Commer

cial C

rime

Endow

ment

AE Misc

Fine A

rts$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

Universe of UTHSC-H Insurance Policies by Total Premium Cost and Management Unit

(based on FY10 data)

Insurance policies managed by SHERMInsurance policies managed by Legal Affairs

*Does not include flood premium on all buildings

$19K $10K $1K$26K$33K

Insurance policies managed by Human Resources

$30k

Ann

ual P

rem

ium

Insurance policies managed by AE

$5K

17