Federated Update Brian Grogan Account Executive Federated Rural Electric Insurance Exchange

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Federated UpdateBrian GroganAccount
ExecutiveFederated Rural Electric Insurance
Exchange
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Finance Update

• YEAR END 3/31/2010
  2009
• Total Assets
  351.7 Million 368 Million
• Surplus
  109.9 Million 110 Million
• Net Margins
  12.5 Million 4.5 Million
• Combined Loss Expense Ratio 100.9
  98.2
  

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Property Inventory Valuation

• Replacement Cost Value
• The amount it would take to replace property with
  like property of the same quality and
  construction.

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Property Inventory Valuation

• Actual Cash Value
• Working rule-of-thumb definition replacement
  cost new at the time of loss, less depreciation.

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Property Inventory Valuation

• Book Value
• The dollar amount of property shown in a
  companys books.

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Property Inventory Valuation

• Market Value
• The amount that a piece of property could be sold
  for in the open market.

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Property Inventory Valuation

• Insurance to value
• Making sure that the amount of insurance that you
  carry is enough to cover all of your property at
  its Replacement Cost Value.

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Extra Expense Coverage

• Provides reimbursement for additional necessary
  expenses incurred because of an insured property
  loss.
• 50,000 limit is automatically included in all
  ARB policies for Extra Expense Coverage.
• Higher limits are available

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Extra Expense Coverage

• Do I have enough coverage?

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Federated Information Security Liability Program
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Could This Happen to You

• A laptop within your organization containing
  sensitive information is lost or stolen
• Sensitive information is accidentally sent to the
  wrong fax number or email address
• A disgruntled employee steals sensitive
  information and sells it to information thieves,
  or even a competitor
• A hacker located in Nigeria hacks into your
  network and sells all of your customer data
  leading to customer identity fraud
• A vendor whom you outsource services to has a
  breach to their network which also affects your
  customer base.

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What are the Risks?

• The key exposure is disclosure. Examples
  include the theft of customers names with social
  security numbers, credit card or bank account
  data essentially any personally identifiable
  information.
• Utility Companies also have significant
  exposures through their distribution / member
  connection and infrastructure systems.

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Security Privacy Liability

• Security Liability is where unencrypted
  computerized information or paper documents
  containing personally identifiable non-public
  information is acquired or accessed by an
  unauthorized person
• Privacy Liability is the violation of privacy
  laws or regulations that permit individuals to
  control the collection, access, transmission,
  use, and accuracy of their personally
  identifiable financial information.

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Direct Loss of Data Breaches
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Coverage

• Individual Policy limit s from 1 to 2 million
• Security/Privacy Civil Liability Coverage is for
  3rd party defenses
• Employee Privacy Coverage
• Regulatory Defense and Penalties
• Notification Cost Crisis Management

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Extended Security

• Vendor Risk Management
• Security Certifications
• Insiders may be predators
• Responsibility rests with the data collector
• Traditional insurance

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Underwriting Process

• Quote Submission Process
• Basic Application- online
• Underwriting examines the security of the company
  and points out key concerns
• Quotes turned around quickly
• Insurance sits above the clients best efforts

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Where do I go with questions?

• Visit our website
• www.federatedrural.com
• Questions can be submitted electronically when
  you request a quote
• Your Federated Account Executive

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Investing in the Future of Co-ops

• Each year Federated sets aside a portion of our
  members premiums to be returned to statewide
  associations in support of the safety and
  training programs provided.
• 2.3 Million

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Thank You