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In Table 2 we display the additional projected losses to go to a different limit from the
<br />current $1 million SIR to the various alternative SIRs in Table I.
<br />Table 2
<br />Additional Projected Ultimate Limited Losses
<br />at Various SIRs and Confidence Levels
<br />2012/13
<br />Note: (A) to (E) are from Table 1 minus (C).
<br />Table 2 can be interpreted as follows:
<br />To go from $1 million SIR to $500,000 SIR, the City would not bear the "expected" losses in
<br />the layer from $500,000 to $1 million. These costs would be shifted to the excess pool, in
<br />exchange for a premium contribution. Assuming that this premium is about $30,000 (the
<br />premium for the upcoming year 2012/13 was not available, but the premium quoted for
<br />2011/12 by CJPRMA was $29,815.), the City would pay $30,000 to cover the "expected"
<br />losses of $175,200 from Table 2, for a net savings of $145,200. However it is very important
<br />to bear in mind that the "expected" losses are an estimate based on long -term averages of
<br />other similar entities, and do not solely reflect San Leandro's loss experience in this layer.
<br />San Leandro's loss experience is reflected in Table 3A and 3B. Moreover, the "expected"
<br />losses are subject to great variation due to the sparsity of claims in higher layers.
<br />We have also reviewed the size of loss distribution as shown in Table 3A and Table 3B.
<br />These represent 30 years of claims from July 1, 1981 to June 30, 2011.
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<br />(A) $500,000
<br />($175,200)
<br />($217,248)
<br />($264,552)
<br />($350,400)
<br />(B) $750,000
<br />(81,760)
<br />(101,382)
<br />(123,458)
<br />(163,520)
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<br />(D) $1,500,000
<br />116,800
<br />144,832
<br />176,368
<br />233,600
<br />(E) $2,000,000
<br />198,560
<br />246,214
<br />299,826
<br />1 397,120
<br />Note: (A) to (E) are from Table 1 minus (C).
<br />Table 2 can be interpreted as follows:
<br />To go from $1 million SIR to $500,000 SIR, the City would not bear the "expected" losses in
<br />the layer from $500,000 to $1 million. These costs would be shifted to the excess pool, in
<br />exchange for a premium contribution. Assuming that this premium is about $30,000 (the
<br />premium for the upcoming year 2012/13 was not available, but the premium quoted for
<br />2011/12 by CJPRMA was $29,815.), the City would pay $30,000 to cover the "expected"
<br />losses of $175,200 from Table 2, for a net savings of $145,200. However it is very important
<br />to bear in mind that the "expected" losses are an estimate based on long -term averages of
<br />other similar entities, and do not solely reflect San Leandro's loss experience in this layer.
<br />San Leandro's loss experience is reflected in Table 3A and 3B. Moreover, the "expected"
<br />losses are subject to great variation due to the sparsity of claims in higher layers.
<br />We have also reviewed the size of loss distribution as shown in Table 3A and Table 3B.
<br />These represent 30 years of claims from July 1, 1981 to June 30, 2011.
<br />;.
<br />2
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