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Spain Agency, Inc ... ... .. SUpervisor Office JAN 26 2011 Received '; .. ... Town of Wappinger RFP Insurance Consultant/Agent .. ~ .. Due: January 31st, 2011 ... .. Presented by .. ! ... ; ... t ... Spain Agency, Inc. Your Protection Is Our Business L ;?, .. Brian J. Miles Michael Spain 625 Route 6 Mahopac, NY 10541 845-628-4500, Ext. 228 Fax: 845-628-1804 Cell: (914) 672-8027 Email: bmiles@spainins.com ~ I. .. .. iii .. 625 Route 6 Mahopac, NY 10541 It. January 25,2011 " Spain Agency, Inc. Your Protection is Our Business 845.628.4500 Fax 845.628.1804 www.spainins.com J. :j .. Mr. Christopher J Colsey Town of Wappinger-Supervisor 20 Middlebush Road Wappingers Falls, NY 12590 i. iI. Re: Town of Wappinger Insurance Request for Qualifications from Insurance Consultant! Agents; RFQ # 13.10 .. Dear Mr. Colsey:: Ii. The Spain Agency is pleased to respond to your Insurance Broker(s) of Record (RFP) for the Town of Wappinger ("the Town") Ii ... Our agency has extensive experience in insuring public entities and is one of the largest agents for this type of business in New York State. Reference information and a list of municipalities that have chosen to utilize our insurance services are attached in this packet. i. i. The Spain Agency is a family owned independent Agency that has been in business since 1922. We have approximately 31 employees and have offices in Mahopac, NY, Armonk, NY and LaHabra, CA. The Agency was chosen by Best Practices in 2005 as one of the Top 7 performers countrywide, and from 1997-2010 as one of the Top 195 performers countrywide. The Agency is also part of an elite group of agencies in the country that participate in the Agency Peak Performance Exchange (APPEX) run by Marsh-Berry Consulting. The Agency is ranked 3rd out of 120 agencies countrywide that participate in the APPEX program. A Press releases on the Best Practice awards are attached. ~ .. II. .. Throughout this proposal, you will note that we emphasize a total team approach and that we are dedicated to controlling your costs and minimizing losses through a variety of innovative services. Weare committed to providing services superior to anything else available in the market and believe that the key to long-term success with our clients is based on the quality of services being offered. L It;: Spain Agency looks for public entities that fit into the Spain consultative model through use of our diagnostic surveys and the subsequent implementation of a service action plan for our clients. Spain Agency will provide insurance products, but will also be a risk management partner and trusted advisor for the Town. Spain Agency utilizes a unique four step Risk Management process to identify, understand, implement and monitor the risk management strategies (attached). Spain Agency's four step risk management process has been the cornerstone of our foundation for delivering insurance and risk management advice to our clients. &' .... L i. 1 II. Your Insurance Professionals Since 1922 .. .. .. Spain Agency's coverage philosophy is to focus on addressing the coverage needs of public entities 365 days a year. We review all proposed policies offered by the insurance carriers since not all policies are the same. What coverages are included or excluded in the contract? What exposures have the most financial impact on a public entity and require specific coverage? Will all services and operations provided by the public entity be protected? What deductibles and self-insured retention can your budget absorb? We work closely with our clients in analyzing risk retention and typically discuss several alternatives based on cost and exposure. What limits are needed to provide financial stability? We also check on insurance companies' consistence in coverage before recommending a purchase. .. .. .. .. In both our risk management 1 loss control and claim management departments, we will implement risk improvement and cost containment programs for the Town. We ask that you view these not solely as quality control issues, but also from what impact they will have on overall costs and workers' productivity. When you pay fees 1 commissions to an insurance broker, you should expect them to work with you on managing your overall costs. .. .. Our risk management 1 loss control department will have individuals who are dedicated to the Town. We strongly believe that our public entity business has grown due to our thorough insurance coverage knowledge, competitive costs and outstanding services. The Spain Agency's claims department is privileged to have well versed employees in the area of coverages, claims and laws. Our company uses our talent to foster relationships with our customers in the area of claims management. This process is achieved by analyzing claim history and industry standards. Our staff can then communicate with individual accounts to help them manage their risks more effectively. ... .. ~ ... ~ The claims department provides day-to-day claims assistance on claim issues. Our staff assists in the resolution of coverage disputes and identifies and corrects any breakdowns in the claim management process. The claims department has the ability to assist with the claim recovery 1 subrogation process and also litigation support. This department ensures that each claim is settled in a timely manner. Our staff also has a strong relationship with independent adjusters, legal counsel and loss control specialists. lit ~ .. i.. Spain Agency has the ability to educate our customers with regards to the complete claim management process. This process is done from the time the claim is reported until the claim is settled. Spain Agency consistently follows through on each insured's claim for proper claim handling. Our goal is to make sure our clients are completely satisfied in the event they have a claim. t WJ ... 1} ~' .. Spain Agency utilizes the following methods to monitor and report claims 1 lawsuits and loss experience from inception to closing: ~ .. 2 ~ .. - - - - . .. . . . "- lilt . .. . ... .. .. ~. II. III ~i iii . III . III . . · The Spain Agency has various reporting methods to report a claim such as via email.by phone, through the internet, real time and/or fax. We are committed to report claims the same day they are received. Spain Agency uses TAM/Applied to create and monitor the claims using the most contemporary and efficient reporting and diary system. Spain Agency uses real time which allows us to report claims instantaneously and obtain minute to minute claim updates. All summons and complaints are followed up within 24 hours to ensure the carrier has received same. The process is streamlined for a follow-up for the carrier's coverage opinion and, in those instances where there is no coverage, we will review the policy to ensure the carrier's decision is appropriate and advise the account that they will need to retain their own counsel to timely answer the complaint. We have access to the carrier's web-based systems and can run detailed loss reports, which includes Risk Management Information System (RMIS). The claims department has over 20 years of experience in the insurance industry with experience in lines of insurance such as: general liability, property damage, business interruption, crime, workers' compensation and automobile liability, to name a few. In addition to the claim reports normally provided by the carriers, Spain Agency also provides the following: · Spain Agency offers Tort reports which is a detailed analysis of the claim in its current stages, including reserve analysis and deductible information, to satisfy your company's accounting needs. · Spain Agency also has an in-house risk manager that can perform risk assessments. These assessments include control initiativ~s and help to reduce risk within your business through prevention. Spain Agency provides the following services that would assist the Town in the control of the costs associated with claims. Spain Agency can provide reporting and monitoring of third party claims to cut down on your company's costs in incurring out of pocket deductible amounts. Spain Agency can create, implement and monitor special handling instructions designed to meet the needs of your insurance program in conjunction with the insurance carrier. These instructions are developed with cost containment in mind to ensure the claims are not being over-reserved or settled frivolously. 3 - . . Our primary goal has been to find the means to protect our clients from difficult exposures that many carriers have excluded. One of the coverage aspects being debated through the industry is the application of some type of exclusion for terrorism. Many in the industry feel the exposure is too large and complex to be adequately underwritten. The Spain Agency respectively disagrees. We believe the industry needs to better define what constitutes a terrorist event and recognize those specific classes of business that are truly exposed to international terrorism. We have all of our public entity clients insured for terrorism and see terrorist exposure as one exposure that we had to find a solution for that made sense for both our clients and the insurance companies. In addition to terrorism, the majority of our public entity clients have insurance for pollution (first and third party), flood and earthquake, employment practices liability and crime coverage. - - . .. Spain Agency continually advises our public entity clients with regard to property coverages, inland marine, crime and fine arts. We strive to insure property for our clients on replacement cost and agreed amount with no coinsurance clauses. We review the business income and extra expense exposures and propose boiler and machinery, earthquake and flood coverage. We advise our clients when a particular property is located in a flood zone that is eligible to be covered by a National Flood Insurance Plan (NFIP) since the limits required by NFIP would be either primary or the deductible, if not purchased. Crime policies are checked for limit adequacy and we make sure faithful performance is covered. Inland marine policies are updated annually for corresponding ACV values or replacement cost, depending on how a particular item is covered. .. .. .. .. We are also very familiar with directors & officers liability, public officials' liability and professional liability coverage, including employment practices liability. The majority of our public entity clients purchase these types of coverages. Spain Agency is well versed in the aspects of these coverages such as policy forms, retroactive dates, defense inside or outside the limits, deductible inclusive or exclusive of defense costs, who is an insured, first and third party EPLI, EPLI to be included or purchased separately, and tail options. .. .. .. We perform the following services on a routine basis to our public entity clients: .. · Certificate of Insurance review · Certificate of Insurance Issuance · Drivers License Checks · Auto Changes and J.D. Cards · Sub-Contractor Insurance and Indemnification Review · Placement of Insurance Coverage · Auto Physical Damage Not at Fault Subrogation Assistance if Self Insured for Physical Damage · Quarterly Loss Control Reports lilt .. 'i ... 4 .. - . - · Review Monthly Claim Reports · Safety Committee Attendance · Ongoing Risk Exposure Review · Presentation of Insurance Reviews and Renewals to Public Entity Boards · Claim Strategy with Public Entity Attorney and Risk Management · Assistance with In-Service Training and Education · Invitations to Spain Agency's Local Training Seminars - Recently held seminars include: Employment Practices Liability Workers' Compensation Law Enforcement Liability - - - .. Our coverage philosophy also incorporates the review of the financial stability of the insurance carriers. Not all companies have the same financial strength. Does the company have a strong AM Best rating? Do they have a solid underwriting performance? Do they maintain high policy holder retention? Do they use financially sound reinsurers that have expertise in municipal insurance? We also review the insurance company expertise in insuring public entity business. What expertise does the provider have? How many years have they been involved in this line of business? Does the provider insure other similar risks? Are they affiliated with or endorsed by other municipal organizations? .. .. .. The Spain Agency is the largest Agent for NYMIR and the N.Y. Comp Alliance statewide. Spain Agency is the exclusive marketing and service agent for NYMIR in Dutchess, Putnam and Westchester County's. NYMIR is the largest insurer of municipalities in NY state and currently insures 631 municipalities and I have attached their most recent annual report for your review. .. .. Our agency also looks for ways to positively impact our client's bottom line through strategic elimination, financing, reduction and/or shifting of risk. Spain Agency is committed to explore alternative approaches to risk financing for our clients and has a proven track record of success in the implementation of these alternative risk financing programs. Some examples of recent alternative risk financing programs that Spain Agency has implemented are: .. .. 1. .. 2. .. 3. .. Westchester County - Secured a three-year property policy with insurance values exceeding $2.5 billion utilizing a $250,000 deductible. Liberty Lines Transit - Secured a $50 million bus liability program for a public transportation company utilizing a $250,000 S.I.R. Spain Agency coordinated the use of a T.P.A. to handle the claims with the insurance carrier. Putnam County - Secured an excess workers' compensation policy for a large municipality utilizing a $450,000 S.I.R. and all lines Property and Casualty program utilizing a $100,000 deductible with first dollar defense. lilt 5 .. - - - 4. New York State Thruwav Authority - Prepared and developed a workers' compensation self-insurance feasibility study. Spain Agency collected and analyzed all pertinent data and worked with various excess workers' compensation carriers and actuarial companies. Spain Agency delivered a comprehensive document which included projection of funding analysis, risk margin and actuarial assumptions. - - 5. Village of Port Chester - Coordinated the transfer from a self-insured workers' compensation plan to a first dollar program. Secured an all lines Property and Casualty program utilizing a deductible up to $50,000 with first dollar defense. - .. Spain Agency's implementation approach is that we will deliver consultative support that positively impacts the Town through strategic elimination, financing, reduction and/or shifting of risk through effective insurance programs and risk management plans. When public entities partner with Spain Agency, they gain access to innovative insurance solutions. Some of the advantages for the Town is that Spain Agency provides a wealth of Property and Casualty insurance solutions, including loss control and cost containment programs, risk management tools and safety related communications. These value added services enhance our commitment to strategic planning, expertise and technology. We are confident our innovative products will benefit the Town. .. .. .. Although new challenges await us going forward, our values are clear and the tools for success are in place. We understand that New York's government budgetary constraints continue to put a strain on your finances, however Spain Agency is confident that we will provide some measure of relief by continuing to deliver on our promise of service and pricing stability to our clients and, if given the opportunity, to the Town of Wappinger. .. lit We look forward to working with you and the Town. lit Best regards, .. Brian 1. Miles Vice President lit BJM/jp Ene. .. .. .. 6 .. . . .. ., . . .. "..... I"' '" ~.. , I I THE BOARD OF GOVERNORS John layne, President Deputy Code Enforcement Officer, Upper Nyack Robert Bondi, Vice President County Executive, Putnam County Don Barber, Treasurer Supervisor, Caroline John T. McDonald III, Secretary Mayor, City of Cohoes John laPointe, Past President Supervisor, Putnam John Gilfeather Budget Officer, Village of Red Hook Sandra Frankel Supervisor, Brighton William Cherry County Treasurer, Schoharie County Kim K. Muller Risk Manager Liaison, City of Oneonta Jon Stead Administrative Officer, Fulton County . . I . . Dominic F. Mazza Livingston County TSB Timothy Whitesell Supervisor, Binghamton Ken Andrews Town Councilman, DeWitt II'" 1" 1"" rCl" r""" F",n r' ,",.. t , f . I I I I ".jI. Itst GlDDlPllg urt/fWlllla. New York Municipal Insurance Reciprocal ~Il$ G ...... ~ ~ ....... . "I A. (ExQClllent) <<--.....--.-....- .....,........-..- 4.1L..tJ..L_ .. ~::'.l!=ii:.::- A4~ ~ --- OUR MISSION NYMIR's mission is to provide the most comprehensive insurance and risk management programs for the local governments of New York State. NYMIR represents control for its members over their own insurance future. Through an elected Board of Governors, members control the company's rates, coverages, claims handling, and risk manage- ment services. Our motto is simple - insuring our own future - that's what NYMIR is all about. WHO WE ARE The New York Municipal Insurance Reciprocal was licensed on August 31, 1993. Members include towns, counties, villages, cities and other incorporated entities with separate taxing authority. The responsibility for the reciprocal is under the direction of a thirteen-member elected Board of Governors, all of whom are elected or appointed municipal officials. The Reciprocal writes property and casualty lines which include property, general liability, law enforcement, public official, automobile, boiler and machinery, inland marine, earthquake and flood, sudden accidental pollution and employment practices liability insurance. It has been a great pleasure and honor to serve as the President of the NYMIR Board of Governors during 2009. We completed our 16th consecutive year of operation in September. NYMIR now proudly serves more than 600 subscribing local governments, continuing to provide the dynamic risk management services and outstanding property and liability insurance protections which have been the hallmark of our program from its inception. This year included a series of successful new initiatives which you will read about throughout the pages of this report. Most notable is the introduction of our online training university which is the result of a new partnership between NYMIR and the nationally recognized on-line education professionals from FirstNet Learning out of Denver, Colorado. I applaud the efforts of the Planning & Development Committee in sheparding this new product to fruition. I also note with particular pride the rate relief we were able to deliver to our members in the past year. I refer you to the Finance Committee report for some of those details, but the efforts of our reinsurance intermediaries from Towers Watson have been a key ingredient in achieving that important result. John Layne President NYMIR Board of Governors I had the opportunity to attend several national municipal pool training and educational events in 2009 and have been heartened to observe that many of the outstanding professionals we have partnered with here at NYMIR are also recognized by organizations such as the Association of Government Risk Insurance Pools (AGRIP) and Public Risk Management Association (PRIMA). It is clear to me that these highly regarded professionals (see listing at the back of this report) are essential to a successful municipal reciprocal such 2 NYMIR AO{lual Report 2009 as NYMJR. As the saying goes, you are only as strong as your weakest I ink and the efforts of our Board of Governors together with our management company, Wright Risk Management, have helped insure that there are no weaknesses in our chain of service providers. Before closing, I'd like to salute our continued strong relationship with the Attorney-in-Fact. I want to thank Jeff Haber, Peter Baynes and Stephen Acquario for their continued efforts and loyalty in supporting and endorsing the NYMIR property and casualty program. Their presence at all our meetings, and more important, their advice and guidance have been invaluable to our Board and this program. As a municipal official and President of the Board of Governors, I believe that NYMIR continues as perhaps the best example of the great possibilities that are available when municipalities can worli together. This Reciprocal continues as a valuable asset for municipalities all across our State and I look forward to 2010 and the opportunities it will provide for NYMJR to further stabilize and reduce the insurance costs of all of New York's municipalities, both large and small. Sincerely, cr-c:rlr John Layne, President NYMIR Board of Governors Kevin Crawford Executive Director NYMIR For NYMIR, 2009 was like the Jack Ingram lyric. "Keep on Keepin' On". The Reciprocal finished its eighth consecutive year of positive combined loss ratio results. This is a testament to the concerted efforts of the entire membership. Congratulations to you all. Theconti nued strong capital position wh ich NYMI R has maintai ned was recognized by A. M. Best which has upgraded NYMIR to A-Excellent to a positive outlook. A. M. Best continues to cite "operating results that consistently out-perform the commercial property and casualty industry, and high policyholder retention" as the supporting rationale for the upgrade. 2009 also saw the completion of the first year of NYMIR's Capital Distribution Program. More than $2.5 million was returned to more than 550 Subscribers who had completed their capital contribution requirements under the Insurance Law. A second year of that three-year program is now underway, living proof of our thriving cooperative partnership. The Distribution Program has allowed me to get around the State and meet many of our members personally, and to thank them for their continuing commitment to this cooperative venture which has exceeded even the most optimistic expectations which greeted its licensure in 1993. 2009 also saw a repeat of two very positive trends from the previous year, namely: 1) the return of former members who departed for pricing advantages that did not continue to prevail; and 2) continued reduction in NYMIR's reinsurance costs. Our continuing growth in surplus has also allowed NYMIR to begin to increase participation with reinsurers in certain layers of exposure, and that in turn has allowed us to pass through additional premium reductions to the membership. As always, I urge you to please use the contact information which appears throughout this report to let us know how we are doing in addressing your property and casualty insurance needs, especially if there are any areas where you see that we need improvement. While we appreciate the occasional 'hosanna' when we have occasion to meet with you during the year, we are equally eager to understand ways in which we can improve our product and services. Our goal is to see that . property and casualty insurance can remain one area that will not distract you from the many challenges you face in these demanding fiscal times. I hope to see many of you throughout 2010. Regards, ~~ NY MIR An nua I Report 2009 3 (Left to Right) Stephen Acquario, Executive Director, NY SAC; Jeffrey Haber, Executive Director, Association of Towns; Peter Baynes, Executive Director, NYCOM Above: NYSAC Deputy Director Mark LaVigne (far right) presents capital distribution funds at meeting of Western New York Inter-county Association. Below: NYMIR subscribers gather at NYCOM Fall Training School. NYMIR Annual Report 2009 , In response to a lack of insurance coverage in the early 1990's, New York's three municipal associations-the New York State Association of Counties, the Association of Towns of the State of New York and the New York Conference of Mayors-came together to form the New York Municipal Insurance Reciprocal (NYMIR). Our associations, on behalf of our memberships, realized that the only way to protect municipalities from another insurance crisis was for local government to create their own insurance company. And, through an act of the State Legislature, NYMIR was created in 1993 with 26 initial local government subscribers. Our associations function as NYMIR's Attorney-in-Fact through the New York State Local Government Services Foundation, Inc. We execute contracts, conduct business transactions and manage the program's now considerable assets. Given our responsibility of representing the interests of local governments statewide, we also serve as powerful advocates for all NYMIR Subscribers. Today, NYMIR insures more than 600 New York municipalities, more local governments than any other carrier in the State. NYMIR is strong financially and according to the rating agencies, "benefits from sponsorships received from the three statewide municipal associations." NYMIR Subscribers demonstrate a critical appreciation of risk management. Our subscribers-our local government members-are good risks because they are good stewards of the public fisc. Our local governments protect public assets-government buildings, fleets of vehicles, government operations-with good people, sound policies, training and supervision. That is the hallmark of our members and that is why NYMIR is an operationally strong and financially sound local government cooperative organization. This year, we mark that strength by providing subscribers with a return on their initial capital investment in the Reciprocal. Over the course of these next three years, NYMIR will be giving back to the governments who have invested in this groundbreaking municipal collaborative. As we close 2009, NYMIR is bigger, stronger and better than we were in 1993 when this experiment all started and we have the hundreds of subscribing municipalities and their public servants to honor for that accomplishment. G. Jeffery Haber, President Peter Baynes, Vice President Stephen Acquario, Secretary II , , , f' f_n r " f' r' ,- r , LETTER FROM THE MANAGEMENT COMPANY As I look at all that has occurred over the 12 months ending December 31, 2009, it surely puts the lie to the old Chinese greeting, "May you live in interesting times". Everyone can agree we just did and hopefully we won't live in quite so interesting times in the future. 2009 certainly was an interesting time and most of the challenges that manifested themselves were economic. The insurance industry, being financial in nature, was not immune but not as severely as the banking and investment communities. However, many of our competitors did experience difficulties but not NYMIR. In fact, NYMIR once again had a very successful year in just about every measurable category. When we talk about measurable success, the two categories that are always worth mentioning are member retention and financial results. As respects retention, we are pleased to report that NYMIR renewed the insurance programs of nearly 99% of our 2008 members. We know our stable and competitive pricing is a large part of that success but it is also the recognition of the many extra benefits the NYMIR program provides to its members. On the financial front, NYMIR once again had outstanding results. For the 8th consecutive year our year-end combined ratio (the standard measure of insurance company profitability) was less than 100%. I doubt there is any other insurance company that can make that same statement. The 2009 combined ratio was more than respectable coming in at 87.9%. NYMIR has never been in a more secure financial position. We have grown our assets by 6.3% to $117,296,238 and increased our surplus 12.3% to $47,755,563. Having healthy asset and surplus positions not only protects the company from unforeseen problems but more importantly, allows us to continue our return of capital program, reduce rates, broaden the coverage we offer and strengthen our (A-) rating from A. M. Best. Add this all up and it becomes clear that NYMIR is the best insurance program to meet your municipality's property and casualty insurance needs. It is both a pleasure and an honor to be the management company responsible for the operation of your company. All of us at Wright Risk Management come to work every day with the sole purpose of generating the results we noted above. We thank you for your continued loyalty and commitment. Sincerely, Brian A. Custer, President NYMIR Division of Wright Risk Management Company, Inc. NYMIR Annual Report 2009 5 NYMIR SERVICE REPRESENTATIVES EASTERN SHORE ASSOCIATES 101 Cayuga Street, PO Box 480 Fulton, NY 13069 Telephone: 800-836-3324 MANGINSURANCEAGENCY 49 Court Street The Metro Center Binghamton, NY 13901 Telephone: 607-352-2850 NORTHERN INSURING AGENCY 171 Margaret Street, PO Box 789 Plattsburgh, NY 12901 Telephone: 518-561-7000 THE PARTNERS 825 Vestal Pkway W. Vestal, NY 13850 Telephone: 607-754-1411 SPAIN AGENCY 625 Route 6 Mahopac, NY 10541 Telephone: 800-247-5521 SPRAGUE INSURANCE 34 West Market Street, PO Box 98 Corning, NY 14830 Telephone: 607-937-8371 NYMIR Designated Broker Service Representatives 6 NYMIR Ar)nual Report 2009 The Insurance industry is infamous for its cyclical and sometimes volatile nature, moving from soft market pricing to a hard market, and then back again. Unlike health insurance and workers' compensation costs which have continued to rise steadily over the past 5-10 years (often at alarming rates), the property and casualty industry has experienced soft market conditions over much of that same timeframe. Given that prevailing market environment, our Committee was extremely pleased to see NYMIR achieve the results which appear in this report. The last eight years of surplus growth and low combined loss ratios have allowed NYMIR to continue to reduce rates. We have done so in a steady, predictable fashion which we hope and believe matches up well with the needs of mayors, supervisors and county executives when developing and adopting municipal budgets that make sense for their taxpayers. The Committee and I were extremely pleased to see NYMIR close out 2009 with 32 new members and a total of 613 Subscribers spread all across the State. Among that group were nine subscribers who had left the program in prior years due to a temporary pricing advantage. Regrettably for them, those tempting premiums disappeared on subsequent renewals. We are happy to have them back in the NYMIR fold. One of the more significant developments for our Committee during 2009 was the development of an Online University hosted on our redesigned website www.nymir. org. Working with the Rules Committee and our resource partners at 1 st NetLearning, the first colleges focus on exposures facing our police and sheriff departments and on the difficult decisions which planning and zoning boards face. The quality of this online training material is really outstanding and I invite all members to go to the website and review the material. It should be interesting and of value to all municipal officials, not just our sheriffs, police, and land use officials. NYMIR continues to benefit from the great loyalty shown by our growing cadre of brokers and agents. (See adjacent listing) Several have again stepped forward and committed to exclusive marketing of NYMIR in additional county areas. We look forward to continuing our relationship with these insurance professionals who recognize the unique value and attributes of the NYMIR program. It will allow us to continue to build on our 17 years of outstanding service and risk management for local government officials throughout New York State. Regards, John T. McDonald, III, Chair WOW! What an exciting year 2009 turned out to be for our Committee. We were indeed fortunate to be working on all cylinders and fortunate still to be in a position to deliver important results for the 600+ membership of our Reciprocal. First, on the accounting front, I am pleased to report that we again received a clean, unqualified opinion from our independent auditors Johnson & Lambert. A review of those financial statements (seen elsewhere in this report) will show a total subscriber surplus of just over $47 million. This in turn has persuaded A.M. Best to reward NYMIR with an upgrade to a positive outlook --and likely more positive news down the road for our current A- (Excellent) Rating. When it comes to member premiums for 2009, the Committee was very happy to work with our reinsurance intermediaries at Towers Watson to achieve significant property (5%) and casualty (15%) rate reductions and that it is a prospect that should continue for 201 0 as well. Also, the Board approved a net rate decrease of 5.4% across NYMIR's six lines of primary .coverage and we hope the positive year end results from 2009 will allow even further relief for 2010. While you will notice that NYMIR is back growing in terms of total numbers of Subscribers, the actual premium collected is slightly smaller. This reflects, in part, the lower premiums, but also the exercise of underwriting discipline which has meant that a few larger accounts have left the program, at least for the short term. That underwriting discipline is what allows us all to sleep well at night and you can be sure that it will remain a core principle of our Finance Committee's work on your behalf. I'm also proud to report that our Committee has continued to exercise great caution and conservatism when it comes to managing our now considerable portfolio of assets (now in excess of $100 million). NYMIR treats those monies as if they remain in your own municipal accounts, and we invest them only in strict accordance with the investment standards contained in the General Municipal Law. As a result, we have avoided all of the anxiety and tumult coming from Wall Street and continue to produce predictable and dependable returns (over $4 Million). Please refer to PFM's investment update (p. 10) for more on that subject. Throughout the year, our Committee continues a focus on the expense side of the ledger as well. The goal is that every premium dollar collected is expensed in the most responsible and efficient manner possible. I can report that we have kept all our major expenses -- including payments to our well-respected management company, reinsurance intermediary, actuary and property appraisal firms --at or below amounts expended for the prior year. While this may not always be possible (especially if we begin to grow again), I hope it demonstrates that we are committed to keeping our costs of overhead and administration as low as possible, such that we can continue to deliver the best coverage at the most efficient price. Since we finished 2009 with another outstanding combined loss ratio, I am confident that 2010 will bring more good news on the financial front. I look forward to reporting those results to you again next year. Very truly yours, Donald Barber, Chair Finance Committee MEMBERSHIP GROWTH [,S H 700 50,000,000 45,000,000 40,000,000 J'i,OOO,OOO . . I I I II I wo :: III 200 100 1O,[}lJ(),()(I(I 25,000,000 20,ooo,[)00 15,000,000 10,000,000 ';,000,000 1000 1001 2002 1U03 lOW 1005 100b 1007 1008 1009 2000 2001 2001 1003 lOfH 2(1()5 1m6 2007 2006 NYM.lR Annual Report 2009 7 2009 NYMIR Risk Management Award Recipients Town of Kirkland Village of Camden Genesee County (left to right) Kirkland Highway Superintendent Jon Scott; Supervisor Robert Meela; Police Chief Dan English. 8 YMJR Annual Report .2009 Two of the ways in which NYMIR continues to stand apart from commercial, for-profit providers is a focus on providing the insurance products which local governments need, and developing new risk management programs and services and designing ways to deliver them to our diverse membership. 2009 saw significant developments on both of those fronts. First, our Committee worked closely with the Planning & Development Committee in the development of an On-line University and its law enforcement liability tutorials. I want to recognize the efforts of Bob Bambino in shepherding this project to completion. He sought out and utilized the leading experts in their field in developing the training material that addresses five substantive risk areas where NYMIR sees the greatest exposure for members and our Reciprocal. The feedback we have received thus far from police chiefs and sheriffs from around the State has been extremely positive. We look forward to developing a series of additional University "colleges". Each will focus on other important areas of exposure to our member local governments. As an example, we plan to have a parks and recreation tutorial up and running for the 2010 summer season. Most will have a test function built in so that your employees and officers can learn the material online at their convenience, then proceed to take a test and print a certification of completion as evidence of that training. Our Committee also dedicated time this past year to a project which focused on re-tuning some of the key coverages which our members have needed. Some of the claims experience we saw in 2008 and early in 2009 convinced us to revisit NYMIR's pollution exclusion, for example. We have successfully identified and defined new areas where we can offer coverage that many of our members require, particularly given the extensive catalogue of water and sewer facilities that most members maintain. We also spent considerable time in reviewing our critically important reinsurance contracts. We have added provisions to insure that the coverages afforded by our reinsurance partners match up with those we seek to offer in the primary layers. Our partners from CNA, Markel and Genesis were cooperative and accommodating during this project. We appreciate the collegial way in which each has moved to address our goal of offering coverage which is second to none. WRM's Wayne Keebler was critically important to this project and we salute his expertise as well as the time effort he contributed. As always, we encourage our members to communicate through your brokers, through the Board or to our Executive Director directly whenever and wherever you see coverage or service issues where improvement is needed. Very truly yours, Tim Whitesell, Chair . , I , , r r f r r r" I , , BALANCE SHEET Years Ending December 31,2009; December 31,2008; December 31,2007 2009 2008 2007 ASSETS Bonds $103 ,465 ,542 $93,821,896 $75,786,090 Cash on hand and on deposit 6,005,923 8,858,910 15,769,120 Premium receivable 5,569,484 5,781,716 7,213,935 Reinsurance recoverable or losses 1,588,355 951,653 1,058,813 Deductible recoverable 10,794 4,684 6,022 Interest, dividends due and accrued 656,140 911,331 815,185 Total Assets $117,296,238 $110,330,190 $100,649,165 LIABILITIES AND POLICYHOLDER SURPLUS Unpaid losses and loss adjustment expenses $54,216,452 $53,087,290 $50,988,716 Unearned premium 10,493,567 10,115,203 11,021,909 Miscellaneous liabilities 4,830,656 4,610,766 6,652,176 Total Liabilities $69,540,675 $67,813,259 $68,662,801 Policyholder surplus Capitalization paid $9,496,117 $12,041,691 $11,586,768 Unassigned funds 38,259,386 30,475,240 20,399,596 Surplus as regards policyholders 47,755,563 42,516,931 31,986,364 Total Liabilities and Policyholders Surplus $117,296,238 $110,330,190 $100,649,165 STATEMENT OF INCOME AND POLICYHOLDER SURPLUS INCOME Premium earned $32,244,134 $32,128,380 $31,314,783 Less: Losses and loss adjustment expenses incurred 17,933,445 17,858,215 18,691,131 unallocated expenses (management, producers, operating) 10,736,533 9,437/378 10/060/279 Investment income 4/061,283 4,195/146 4,108,511 Net income (including adjustments) 7,631,896 9,031/773 6,671,884 POLICYHOLDER SURPLUS (GAINS and lOSSES) Policyholder surplus beginning of year 42/516,931 31,986,364 25,870,452 Plus: Net income plus change in non-admitted assets 4,960,559 10,075,644 5,485,605 Surplus paid in 278,073 454,923 630,307 Policyholder surplus at end of year 47,755,563 42,516/931 31,986,364 Certified Financials available upon request. NYMIR Annual Report 2009 9 The recent credit crisis drove interest rates to all-time lows, altered the investment landscape, and brought with it challenges to meeting investment objectives. NYMIR, working through its investment manager, adapted to these changes by employing a combination of methods: traditional approaches to managing insurance assets, and new ones that capitalized on unique aspects of the post- bubble economy. The economic recovery process has created what some have labeled a "new normal" - where the systematic deleveraging and reregulation of the capital markets result in lower growth, higher unemployment, low inflation, government pumped billions of dollars into the banking system in an attempt to stabilize the financial markets and support lending. With the aftershocks of a global recession now evolving into sovereign debt problems in Europe, it is no surprise that the Federal Reserve has expressed its intent to keep short-term rates near zero for an extended period of time, reinforcing the evolution of a "new normaL" With market conditions at extremes due to the unique nature of the market meltdown, it was vital that NYMIR maintain its disciplined investing principles "NYMIR's investment approach - stressing conservative investments in high quality Treasury and Agency securities, collaboration with an independent investment manager, and consistent implementation of NYMIR's long-term investment strategy - once again served the NYMIR subscriber base well." and a bigger role for governments, regulators and politicians. Thus far, the new normal has resulted in an extended period of very low interest rates. Described below are the origins of this rate environment and a summary of what NYMIR has done to weather these stormy and shifting seas. As the housing market imploded, the Federal Reserve cut short-term rates to a stated range of 0% to 0.25% - the lowest level in history. Investor uncertainty in the future of financial markets also drove longer-term interest rates lower. At the same time, credit risk surged, culminating in the widely publicized failures of Bear Stearns, Lehman Brothers, Washington Mutual and hundreds of smaller banks across the country. The Federal Reserve, together with the Treasury Department, FDIC and Congress, created an alphabet soup of programs to provide liquidity, stability and capital support to the markets. This consisted of part policy, part experimentation, and large part desperation. But, with the u.s. economy on the verge of depression, these extraordinary stimulus measures brought the global economy back from the brink. In the face of the highest unemployment rate in decades, the U.S. 10 NYMtRAnnua.1 Report2(J09 which remained integral to accomplishing its long-term investment objectives. When managing an insurance portfolio, the fundamental strategy is to match investment maturities to projected liabilities. That is, if NYMIR expects to pay a claim or expense at a specific time in the future, investments are purchased to mature at that time. This process is facilitated by regular communication and information sharing between NYMIR's investment manager, actuary and management. Maintaining this asset/liability discipline throughout an interest rate cycle enables the Reciprocal's portfolio to safely meet its obligations without "betting on the market." Further, this discipline means buying longer-term investments to match liabilities even when rates appear low. While buying longer-term investments when rates appear low may seem counterintuitive, the structure of the yield curve (the yield available at various maturities) currently favors longer investments. The yield curve is currently very steep, meaning longer-term investments have much higher yields than short-term investments. The steep curve provides incentives to purchase longer-term securities for multiple reasons: First, longer-term investments have higher initial yields, providing more income from day One. Second, long-term investments provide more stable earnings, as the rates are locked in for a longer period of time. Third, since rates are expected to be low for some time, it makes sense to take advantage of higher rates now. Lastly, when rates do begin to rise, future premiums as well as maturities can be reinvested at higher future yields. One way NYMIR increased earnings on its portfolio was by taking advantage of yield pick- up opportunities resulting from the steep yield curve. An additional consequence of the recent crisis was the widening of yield spreads - the difference in yield between various investment sectors. With the housing crisis fresh on investors' minds, market participants were hesitant to purchase Federal Agencies, driving their yields higher. This meant the spreads between Agency and Treasury securities widened to historic levels. Being the primary sectors in which the NYMIR portfolio is invested, there existed an added incentive to purchase Agency securities instead of lower-yielding Treasury securities. As the U.S. Treasury made its backing of the Agencies more explicit through conservatorship and capital guarantees, the yield spread narrowed drastically. The NYMIR portfolio, which was invested heavily in Federal Agency securities, experienced significant market value gains, helping offset the general decline in rates over the past few years. NYMIR's ability to remain disciplined in its core investment philosophies and to employ tactics adapted to this "new normal" helped the Reciprocal exceed its earnings projections. The NYMIR portfolio earned over $4 million in interest earnings over the past year, the highest level in the past three years. Throughout 2009, NYMIR was able to avoid credit and liquidity issues that plagued many insurers, while earning competitive yields on its investments. NYMIR's investment approach - stressing conservative investments in high quality Treasury and Agency securities, collaboration with an independent investment manager, and consistent implementation of NYMIR's long-term investment strategy - once again served the NYMIR subscriber base well. PFM Asset Management LLC (PFM) is an independent Investment Advisor registered with the SEe. PFM has served as investment advisor to NYMIR since 1995. At right: Jeff Haber, Association ofTowns Executive Director with Town of Owasco Councilman Terry Lattimore and Designated Service Broker Bob Wallace. John Rymph, Chair of Washington County Board of Supervisors accepts county share of capital distribution ($121,305.) from Kevin Crawford, NYMIR EO. HlstOlkal ,.... }aos .}1Jfl9 ;0" $00% 400'l< '00% 20"" -f:,.dfund Tarcf"t ..-. -2."""US T'fM\lry 2. Yu~ J'fdf'" AcfftC'( 1O0!> 00..... Dn~04 Inc-05 Oec-Of Det-I)? Du-08 Oe-c-Qi N)'MIRAnnualReport 2009 11 NYMIR members are cities, counties, special districts, towns and villages. This year, we welcomed 32 new members. CITIES SPECIAL DISTRICTS Brasher-Stockholm Cobleskill Esopus Hillsdale Lorraine Amsterdam Brasher Stockholm Recreation Center Cochecton Esperance Hinsdale Lumberland Recreation Center Brighton (Franklin) Coeymans Exeter Hopkinton Lyndon Auburn Brighton (Monroe) Cohocton Fabius Hornby Lyons Cohoes TOWNS Bristol Coldspring Fayette Horseheads Lyonsdale Corning Adams Broome Collins Florida Howard Macedon Cortland Addison Brownville Columbia Fort Ann Hunter Maine Gloversville Afton Brunswick Conesus Fort Covington Huron Manheim Albion (Orleans) Butler Conklin Freetown Hyde Park Marathon Jamestown Albion (Oswego) Caledonia Conquest Fremont Ira Marcy Joh nstown Allegany Callicoon Constantina Fremont & Long Eddy Italy Marion North Tonawanda Almond Cambridge Corning Water District Ithaca Marshall Oneonta Amboy Camden & Town of Coventry Fulton Jackson Martinsburg Amenia Camden Ambulance Covert Galen Java Maryland COUNTIES Annsville Campbell Crawford Genoa Jerusalem Mayfield Arcadia Canaan Crown Point Georgetown Joh nsbu rg Mentz Allegany Argyle Canadice Cuyler German Johnstown Mexico Cayuga Arietta Canton Decatur Germantown Kendall Middleburgh Chenango Ashland Cape Vincent Deerpark Ghent Kent Milan CI i nton Aurelius Carlisle DeKalb Gouverneur Kiantone Minden Ausable Carlton Delaware Grafton Kinderhook Minetto Delaware Austerlitz Carmel Delhi & Granby Kingston Moira Essex Ava Ca roga Denmark Granger Kirkland Monroe Franklin Avoca Caroline Denning Granville Knox Montezuma Fulton Avon Catlin Depeyster Green Island Lafayette Montgomery Genesee Baldwin Cato Deposit Greene LaGrange Montour Herkimer Barker Caton DeWitt Greenfield Lake Pleasant Morristown Barrington Cay uta Dickinson (Broome) Greenwich Lansing Murray Livingston Barton Cazenovia Dickinson (Franklin) Greig Lapeer Nanticoke Orleans Batavia Champion Dover Grove Laurens Nelson Oswego Bath Champlain Dresden Hamden & Hamden Lawrence New Haven Putnam Benson Charlotte Dryden Water Dis!. Lebanon New Scotland Schoharie Berkshire Chateaugay Eagle Hamilton Ledyard Newark Valley Berlin Chatham East Hampton Hamlin Lewisboro Newcomb Seneca Bethany Chemung Easton Hampton Lima Nichols Tioga Bethel Cicero Eaton Hannibal Lincklaen Norfolk Tompkins Binghamton Cincinnatus Edwards Harford Lindley North Collins Warren Bleeker Clare Elbridge Harrisburg Lisbon North Dansville Washington Blenheim Clarence Ellisburg Hartford Litchfield North Greenbush Bolivar Clarkson Enfield Hasti ngs Livingston North Harmony Wayne Bovina Claverack Ephratah Hebron Livonia North Norwich Westchester Boylston Clermont Erin Henderson Lodi Northampton Wyoming Brandon Clinton Erwin Highlands Long Lake Norwich 12 NYMIR Armual Report 2009 Oppenheim Orange Orwell Ossian Ossining Oswegatchie Otisco Otselic Ovid Owasco Owego Oxford Palatine Palermo Palmyra Paris Parish Parishvi lie Perth Petersbu rgh Pierrepont Pinckney Pitcairn Pitcher Pittsfield Pittstown Plattsburgh Poestenkill Pompey Prattsburgh Preble Preston Pri ncetown Pulteney Putnam Putnam Valley Rathbone Red Hook Redfield Richfield Richford Richland Richmondville Rockland Stuyvesant Wolcott Dolgeville Middleburgh Red Creek Rodman Summit Woodstock Earlville Middleville Red Hook Romulus Taghkanic Worcester East Hampton Milford Remsen Russia Taylor Wright East Nassau Millerton & Village of Rensselaer Falls Rutland Th roop East Syracuse Millerton Water District Richmondville Rye Thurman VILLAGES East Williston Millport Richville Salem Ticonderoga Adams Edwards Minoa Sagaponack Salisbury Tully & Tully Addison Elhridge Mohawk Salem Sandy Creek Ambulance Alton Ellisburg Morrisville Saltaire & the Saltaire Sanford Tupper Lake Almond Endicott Nelliston Voluntee Sangerfield Tusten Altmar Esperance New Hempstead Savannah Urbana Argyle Fair Haven Newark Savona Schodack Van Buren Asharoken Fonda Newark Valley Schoharie Schoharie Varick Atlantic Beach Fort Ann Nichols Seneca Falls Schuyler Venice Aurora Grandview-on Hudson Nissequogue Sharon Springs Scipio Vernon Avoca Greenport North Collins Sidney Scott Vestal Bainbridge Hagaman North Haven Sloatsburg Scriba Veteran Baldwinsville Hamilton Northville Solvay Sempronius Victory Belle Terre Hammondsport Norwood South Corning Seward Vienna Bemus Point & Bemus Hancock Oakfield Southampton Sharon Virgil Point Vol. Fire Co. Hannibal Ocean Beach Spring Valley Shelter Island Volney Briarcliff Manor Harrisville Odessa SI. Johnsville Sherburne Wallkill Brownville Hermon Oriskany Falls Stamford Sidney Walton Brushton Hudson Falls Owego The Branch Skaneateles Walworth Caledonia Hunter Oxford Tivoli Smyrna Wayland Camden Jeffersonville Parish & Parish Library Tully South Valley Wayne Camillus Jordan Assoc. Unadilla Southampton Webb Candor Kinderhook Patchogue & the Union Springs Southeast West Monroe Canton Kiryas Joel Village of Patch Upper Nyack Spafford West Sparta Cape Vincent Lacona & Sandy Creek/ Pawling & Pawling Valley Falls Sparta Westfield Cato Lacona Recreation Sewer Commission Valley Stream Springfield Westmoreland & Cay u ga Lake George Philadelphia Van Etten Springport Westmoreland Comm. Cayuga Heights Laurens Philmont Spri ngwater Wheatland Cazenovia Lindenhurst Phoenix Waterloo SI. Johnsville Wheeler Central Square Lyons Piermont Waterville Stamford White Creek Cleveland Lyons Falls Plandome Heights Waverly Stanford Whitehall Clyde Manchester Poland Wayland Stephentown Whitehall Cobleskill Marathon Port Byron Weedsport Sterling Williamstown Cohocton Marcellus Port Washington North West Winfield Steuben Wilmington Cold Brook Mayfield Potsdam Whitehall Stockholm & Winthrop Wilna Delanson Mayville Prospect Wolcott Sewage District Windsor Deposit Meridian Pulaski Woodridge Stratford Wirt DeRutyer Mexico Quogue Wyoming NYMIR Annual Report 2009 1 3 NYMIR I r r I , f"" f' r r I"" , r "" .. , MANAGEMENT COMPANY Wright Risk Management Company, Inc. 333 Earle Ovington Blvd. Uniondale, NY 11553 NYMIR OFFICES 150 State Street, Suite 203 Albany, New York 12207 T 518.465.7552 F 518.465.0724 ACTUARY Tillinghast, Inc., a Towers Watson Company 245 Park Avenue New York, NY 10167-0128 INDEPENDENT AUDITOR Johnson Lambert & Co. One Lawson Lane, P.O. Box 525 Burlington, VT 05402 FINANCIAL ADVISOR PFM Asset Management LLC, One Keystone Plaza, Suite 300 Harrisburg, PA 17101 333 Earle Ovington Blvd., Suite 505 Uniondale, New York 11553-3624 T 516.227.2300 F 516.227.2352 12 Metro Park Road, Suite 208 Colonie, New York 12205-1139 T518.437.1171 F 518.437.1182 1.800.NYMIR05 .. 12010 .. S pain Agency Best Practices Agency I11III .. In October 2010, Spain Agency, Inc. was selected as a Best Practices Agency. It has successfully retained its status for 13 years. .. Our team qualified for this status by ranking among the top performers in the annual Best Practices Study conducted by the Independent Insurance Agents & Brokers of America (IIABA or the Big "I") and Reagan Consulting. .. The purpose of the Best Practices Study is to compile the operating statistics of the country's leading agents and brokers. To achieve this objective, the agencies included in the annual study must first be nominated for participation by an insurance carrier or an IIABA state affiliated association. The agency must then submit detailed financial and operational information which is analyzed, scored, and ranked objectively for inclusion in the study on the basis of operational excellence including growth, profitability, productivity and financial stability. .. .. ... .. Over 1,200 agencies from around the country were nominated in six revenue categories ranging from "Under $1.25 million" in annual revenue to "Over $25 million" in annual revenues. Of the 310 agencies submitting data, only 224 agencies scored high enough to qualify for inclusion. .. .. To retain our Best Practices Agency status we must submit our year-end results for review each year. Every third year, when new agency nominations are accepted, we must re-qualify as one of the top performers in our revenue category. We are pleased to have retained our Best Practices Agency status since 1997. .. lit Participation in the Best Practices Study has become a prestigious recognition of the superior accomplishments of the top insurance agencies in each of the revenue size categories studied. Our inclusion with these 224 outstanding agents and brokers clearly recognizes us as an industry leader. lilt lilt . . .. .. Spain Agency has been providing public entity/insurance since 1922 and currently provides insurance programs for the following: .. Town of Bedford .. Village of Briarcliff Manor Town of Carmel Carmel Fire Department .. Village of Cold Spring Village of Croton-on-Hudson II. Town of Fishkill Town of Greenburgh .. Village of lrvington Town of Kent Town of LaGrange .. Town of Lewisboro Liberty Lines Transit .. Mahopac Falls Fire Department Mahopac Volunteer Fire Department ... Mahopac Library Metropolitan Transportation Authority Village of Mount Kisco . Mohegan Lake Fire Department City of New burgh .. Town of North Castle New York State Thruway Authority Peekskill Ambulance ... Village of Pelham Village of Pleasantville .. Village of Port Chester County of Putnam .. Town of Putnam Valley Putnam Valley Volunteer Ambulance Rennselaer County Tobacco Securitization Corp. .. Rockland County Tobacco Securitization Corp. Putnam County Tobacco Securitization Corp - Putnam County Correctional County of Rockland II. Town of Rye Village of Rye Brook Rye Town Park Commission .. Village of Sleepy Hollow .. 11()?,)1()1 Town of Southeast Town of Stony Point County of Westchester Westchester County Correctional Facility - Superior Officers Association Westchester County Industrial Development Agency Westchester County Para Transit SPAIN AGENCY, INC RISK MANAGMENT PROCESS -; THE PROCESS Spain Agency utilizes a four-step process to identify, understand, implement and monitor the risk management strategies for you and your business. Here, we briefly examine those four steps ! -, -, STEP 1 - Indentify Exposures During this crucial initial phase, The Spain Agency will invest the time to understand every facet of your business in order to help you and your team identify the risks which face your business. By evaluating the effectiveness of risk management programs, practices and resources under real world conditions, we assure that your assets receive precisely the right type of protection. Tour of Facilities Employee Interviews Loss Control Survey Claims/Reserve Analysis Procedures Policy Review Experience Modification Review Job Safety Analysis Employment Practices Emergency Planning Accident Analysis & Injury Causation Contract Reviews Insurance Program Design Review Risk Assessment Claims Reviews Stewardship Reviews Risk Management Service Plans Pre-renewal Strategy Sessions Human Resources/Employment Practice Audits STEP 4 - Ongoing Monitoring & Adjustment You and your business are dynamic - what works for you today might not work as well tomorrow. For this reason, The Spain Agency will continue to monitor and adjust your risk management programs to ensure a perfect fit as your business evolves and changes. This is where The Spain Agencys more comprehensive understanding of your business (see Step 1) can pay huge dividends, by enabling us to precisely tailor your protection to fit the unique needs of your business. STEP 2 - Define Strategies to Handle Risk Once The Spain Agency has developed a thorough understanding of your business, including you industry, corporate culture and operating procedures, we are ready to move beyond insurance, exploring a spectrum of proven alternative strategies to minimize risk and reduce insurance costs. The Spain Agency's comprehensive understanding of you business (see Step 1) will pay huge dividends by enabling us to precisely tailor your strategies to fit the unique needs of your business Risk Minimization Contractual Transfer of Hisk Risk Avoidance Retention of Risk Policies/Procedures and Control Insurance Action Plans Tailored Programs Marketing Insurance Loss Control/Life Safety Claims Management Results Oriented Strategies STEP 3 - Implementation of Programs During the implementation process we put in place specially tailored programs and strategies to protect your assets while reducing insurance cost. A strong belief in The Spain Agency's process motivates underwriters to offer much lower insurance costs on your behalf THE SPAIN AGENCY... RISK MANAGEMENT CONSULTANTS ~, Spain Agency, Inc. Your Protection Is Our Business