Update on Operational Performance of AMERIND's Tribally Focused Programs
Providing an update on the operational performance of AMERIND's Tribally Focused Programs, focusing on sustainability ratios, operational highlights, staffing, challenges in the hard reinsurance market, and loss performance. Details include financial data, mission objectives, and insights into the impact of external factors such as climate change and social inflation.
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Presentation Transcript
Great Lakes Indian Housing Association AMERIND Update October 2021
Executive Summary Objective Provide an update on operational performance of AMERIND s Tribally Focused Programs. Mission Update 1) Be here for as long as Tribes need us 2) Keep Indian money in Indian Country Sustainability Ratios Operating Target Loss Expense Operating Revenue % Change 65% 30% 95% Performance NAHASDA 94% 17% 92%* $12.007M 1% decrease* 2020 Sept 104% 16% 108% $12.096M 7% increase NAHR 115% 17% 108% $5.872M 3% increase 2020 Sept 105% 17% 118% $5.696M 13% increase
Executive Summary (Continued) Sustainability Ratios Operating Target Loss Expense Operating Revenue % Change 65% 30% 95% Performance TGB 69% 19% 75% $11.303M 32% increase 2020 Sept 59% 19% 66% $8.546M 17% increase TWC 41% 19% 49% $7.471M 11% increase 2020 Sept 34% 25% 50% $6.738M 7% increase AMERIND Re Target Actual Performance 100% 110% $4.251M 15% increase 2020 Sept 24% $3.710M 7% decrease Operational Highlights through June 30, 2021 Core program IHBG (NAHASDA) performing at 110% with loss from operations of $1.258M including a $3.3M recovery from reinsurance. All other programs - performing at 90% with income from operations of $2.888M Net investment income and other expense: $5.592M less PPP Net position increased $8.239M
Executive Summary (Continued) 2021 Staffing Jobs at AMERIND 57% Native American operated/ 80% AINS Designated As of 12/31 YTD Budgeted 2019 FTE 2020 FTE 2021 FTE 2021 FTE Total Staffing 52 54 57 70 Diversification of Income Streams 2012 2020 2026 NAHASDA 56% 33% 27% NAHR 16% 16% 15% TGB 15% 24% 28% TWC 13% 17% 19% All Other 0% 9% 11%
Hard Reinsurance Market Causes: Increase in frequency & severity of CAT events Climate change - named & convective storms, wildfires, drought, etc. Social Inflation Uncertainty due to COVID-19 Effects: Reduction in available capital Reduction in available limit More reinsurers needed to fill same limit = > Cost $1.2M in additional premium for 2020 true-up Impact on 2021 Renewal: 40 50% rate increases with certain lines seeing 80-90% increases $2.5M budget shortage Exclusion: Communicable disease (COVID-19)
Loss Performance 5th Consecutive year of higher-than-expected losses: Historically run $13M - $15M Historically 1 bad year followed by 2 good years 18%-25% increase in construction costs 70% of loss costs fire related Severity of loss is increasing Wild-fire, named & convective storms, liability, cyber On track to payout $17M in 2021 Impact on External Reinsurance: Tapped both Per Risk & CAT Treaties multiple times Driving costs up Additional exclusions: Wildfire exposures, AK liability limit, MFA/EPD Impact on Internal Reinsurance (AMERIND Re): Stop loss paying out annually
Reinsurance Market 2022 Outlook Impact on 2022 Renewal: Expect 20-25% rate increases Considering higher retentions to offset increases Quotes not expected until December External Reinsurance: Continued constriction of limit/coverage Changing UW Guidelines Additional exclusions: Wildfire exposures, MFA/EPD Internal Reinsurance (AMERIND Re): Increased dependence offset higher retentions
2022 IHBG Risk Pool Base Rates 2022 Renewal: 12% base rate increase 1st in 14 years Bring property values to 100% of RCV Deductible Options: (Provided at renewal) $1,000 = 8% savings $2,500 = 10% savings $5,000 = 14% savings $7,500 = 20% savings 10,000 = 25% savings Rate Stabilization Fund: (Benefit of diversification) Available to Members in Good Standing Can be applied towards premium
