More frequent and severe wildfires in recent years have prompted a growing demand for wildfire coverage. AEGIS recognizes our role in helping members meet their evolving risks and challenges by continuing to modify the proposed wildfire offering utilizing our strong capital position. Therefore, in response to this ongoing critical member need, AEGIS has taken the following three actions:
Today, we are offering a Group Structured Program to provide an additional $100M wildfire limit.
The Group Structured Program is essentially a Mutual within the Mutual. It will include a well-spread and diverse group of Members.
Unlike the capacity offered currently (full wildfire coverage as standard language in the $50M excess policies) and the Expanded Wildfire Product in development ($25M in additional capacity sitting above the $50M excess policy), this Group Structured Program is not dependent on reinsurance, instead leveraging AEGIS’ existing capital. Consequently, these limits can be deployed quickly. In turn, the Group aggregate limit would serve to reduce the capital risk to
AEGIS and enable lower pricing of these wildfire limits.
Key terms of this Group Structured Program are as follows:
$100M per insured / per year limit
$200M aggregate limit per insured over a three (3) year policy term
$750M All Member Aggregate over the three (3) year policy term. This All Member Aggregate would never have been breached historically.
The highest hazard accounts, which are the four California major utilities or accounts with more than one loss in the last five years, will not be included in the Group Structured Program to protect the All Member Aggregate Limit.
Pricing ranges from $0.8M to $20M per year for $100M, depending on individual member exposure. Based on our wildfire mapping exposure, we have set six hazard groups. The average premium for the targeted portfolio is $5M to $6M.
At the end of the three (3) year term, 90% of program profits will be returned proportionally to all profitable members. Profit deducts a 10% expense load for AEGIS.
We have established pricing for all accounts so that you can evaluate this program specific to your risk. Please contact your broker or AEGIS casualty underwriter for details on pricing. The successful launching of this Group Structured Program depends on the support of a minimum number of Members. Unfortunately, if we do not receive enough interest and spread of risk, this program will be difficult for us to roll out. If you have any questions on the structure or coverage of this product, please contact Martin Gaffney (martingaffney@aegislimited.com).
In addition, we want to remind you that AEGIS Loss Control offers resources and support to ensure safe systems operations, protect workers and the public, and assist in minimizing wildfire-related losses. This includes risk assessments for both Property and Casualty, along with Casualty Focused Services that specifically address wildfire risks.
We thank you for your continued support and active involvement in making the Mutual what it is today. We look forward to hearing from you about this enhanced coverage opportunity.
