Download - Torus Healthcare 2012
A new approach to managing
complex risks
A Torus
presentation
About the Company
Torus Specialty Insurance Company
Torus National Insurance Company
A.M. Best Rating of A- g (Excellent)
Group Rating
Financial Size Category (FSC) of XI*
($750 Million to $1 billion)
(*effective November 8, 2011)
A.M. Best believes the Torus group's consolidated risk-
adjusted capitalization is likely to be maintained at a
strong level, based on performance forecasts and A.M.
Best's specific insurance start-up criteria.
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•Torus is a global specialty insurer.
•Local Underwriting, Global Reach: Torus has operations
in 10 countries, with five regional offices in the US.
•Torus is organized into two core underwriting units: Torus
Americas and Torus International, with each providing
direct insurance for Property, Casualty and Specialty
Lines.
•Torus specialized ventures include our Bermuda-based
reinsurance team, Lloyd’s Syndicate 1301, and our new
status as a licensed and admitted reinsurer in Brazil.
•Torus offers industry-driven insurance products for
Energy, Construction, Aviation, Space and of course,
Healthcare.
About our investors
15 years investing solely in financial services industry
New York-based investing in the US, Europe, Latin America, Asia and Central Europe
Portfolio companies include Axis, Catlin, Kyobo Life and Sparta Insurance
25 years specializing in the energy industry
Global platform with $20 billion of equity investments
Investments in over 100 platform
acquisitions
Portfolio companies include Abbot Group, Acteon & Dresser
A deeper understanding of clients’ risks
Transparency Advanced risk
modeling
More accurate
pricing of risk
Healthcare Overview
Torus believes that the best healthcare institutions work
together with insurance providers to assure that safe,
cost-effective care is provided to patients.
We believe that because dollars spent on malpractice
cases are dollars that are not available to provide care
for patients, we must work to ensure that inevitable
injuries are compensated fairly, not injudiciously.
Further, we believe that healthcare institutions should be
provided insurance mechanisms that reward the
provision of the safest, most effective evidence based
medicine reasonably achievable.
Torus demonstrates these beliefs by providing risk-transfer
tools that truly customize coverage to the needs of your
institution. Some of the tools we offer for customized
protection are:
Swing Plans/Retrospectively Rated Premium
Presumptive Premium Discount
Retention Buy-downs
Split Retentions
Commutation Provisions
Rate Stabilization Endorsements
Fronting Structures
Programs
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Healthcare Overview
Swing Plans/Retros
Swing plans or “retros” offer many advantages
for the insured. Organizations that achieve losses
significantly better than actuarially predicted
benefit from a premium that rewards low loss
activity. Unlike some of the retrospectively rated
plans of the past:
Plans can be structured to have a finite
adjustment period
Premium calculations are simplified.
Unlike some dividend plans, you do not have
to be an Insured five years from now to
receive return premiums
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Presumptive Premium Discount
Rather than requiring an insured to wait until year has
passed before adjusting a premium downward for no
losses occurring, the Presumptive Premium Discount
endorsement allows the Insured to bind coverage at a
reduced premium. Only if a loss occurs, the premium
is adjusted proportionately based upon paid loss
within the Torus layer. If 10% of the Torus limit is
exhausted by a paid claim, there is an additional
premium charge of 10%.
The premium adjustment is proportional to the
amount of exhausted limit.
This endorsement can be modified so the
additional premium is used to reinstate the
exhausted limit.
Healthcare Overview
Split Retentions
Retentions are rarely designed to address the
historical severity arising out a specific location,
procedure or time period. Through account-
specific modeling and manuscripted policy
language, Torus works with Insureds to design
programs that:
Split the retention for OB and Non-OB claims
Stair-step the retention, so incidents from
different time periods have specific
attachments
Allow multi-state risks to schedule different
retentions for each venue
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Post Expiration Retention Buy-downs
Torus provides Insureds the ability to buy-down their
attachment after the policy expires.
An ideal tool to protect against volatility within
the SIR/captive layer.
Prior to binding, we offer pre-determined cost
and time periods to purchase insurance within
the Insured’s SIR layer.
The buy-down of the retention can occur
during or after the policy period.
Healthcare Overview
Rate Stabilization Endorsement
Torus offers multi-year policies in situations when
we can predict the frequency of claims with a
high level of confidence. In situations where
claim activity is less predictable, Torus can offer a
Rate Stabilization Endorsement.
An endorsement that commits to renewal
terms based upon the current rate, terms
and conditions.
The terms remain unless there is a significant
change in loss experience, exposure or
ownership during the policy period.
Commutation Provision
There is a growing interest in reinsurance of lower
layers in captive programs, but Insureds struggle with
the costs and benefits of retaining less risk. When
results appear favorable, a commutation provision
allows the Insured/Reinsured to accept returned
premium by releasing Torus (the Reinsurer) from future
liabilities.
The request to commute may occur up to
three years after the policy expiration.
Depending upon the class of business, the
returned premium may be up to 40% for the
commutation.
This offer is usually made on multi-year policies
or annual policies with high predictability.
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Healthcare Overview
Fronting Structures
There are several reasons why a facility may need
admitted or rated paper, even when they retain a
large portion of the risk. When Insureds need a
“fronting company,” Torus can consider:
Matching deductible programs, where the
Policy’s deductible equals the per-claim limit of
liability.
Collateral in the form of a Letter of Credit or
114 Trust.
A funds-withheld structure to alleviate the
need for a Letter of Credit.
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Program Business
Torus entertains programs for most healthcare-related
casualty and professional lines of insurance. As long as
there is $5M in expected premium volume, we will
consider:
National or state-specific programs;
Single or multi-line;
In-house or third party claims handling;
Agency captive participation or 100% Torus.
Reducing the Cost of Risk
Like the best-in-class providers of medical care, Torus understands the balance between tried-and true
approaches to risk and the need for innovation. In placements where we are the lead insurer, we will
work with you as needed to identify risk consultants who can develop programs that improve your risk
profile…and reduce your total cost of risk.
Our goal is to provide the most appropriate and cost-effective coverage feasible, freeing resources for
your most important mission: maintaining and restoring the health of your community.
A new approach to managing
complex risks
A Torus
presentation