Item I1BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: 1/21/15 Division: BOCC_3
Bulk Item: Yes No X Department: Heather Carruthers —Dist 3
Staff Contact /Phone #: Carol Schreck
305-292-3430
AGENDA ITEM WORDING:
Presentation and update on Fair Insurance Rates in Monroe's (FIRM) Reduce Insurance Premium
Proj ect.
ITEM BACKGROUND:
PREVIOUS RELEVANT BOCC ACTION:
CONTRACT/AGREEMENT CHANGES:
STAFF RECOMMENDATIONS:
TOTAL COST:O INDIRECT COST:
DIFFERENTIAL OF LOCAL PREFERENCE:
COST TO COUNTY: 0
REVENUE PRODUCING: Yes No 0
0 BUDGETED: Yes No
SOURCE OF FUNDS:
AMOUNT PER MONTH_
APPROVED BY: County Atty OMB/Purchasing Risk Management
DOCUMENTATION: Included x Not Required
DISPOSITION:
Revised 7/09
AGENDA ITEM #
Year
-I- 1
1/21/2015
January 2015
-1 C Update
BOC
FAR NMMUMC!MTIN M YONIDE
Reduce Insurance Premiums
Project Status Report •
Fair Insurance Rates in Monroe
January 21, 2015
FIRIA RIPP: What Is It?
Reduce Insurance Premiums Project
Models currently used to predict risk are incomplete
and inaccurate for Monroe County.
Project to develop an accurate wind risk profile for
the Keys that
• Distinguishes between wind and surge damage
• Incorporates accurate building strength data
An accurate profile is the first step needed to
• Establish fair, actuarially sound rates that are neither discriminatory
nor excessive
• Improve rate stability
We can't determine the best option to cover our wind risk until we
fully understand what our wind risk is.
Slide?
1
1/21/2015
RIPP Players
Funded primarily by Citizens Property
Insurance
Overseen by FIRM
Work carried out by
• Applied Risk Analytics (ARA)
• Solaria/K2M
• Willis
RIPP Components
The Initiative consists of three
components:
• A Vulnerability Study to determine the ability of our
building stock to withstand windstorms
• A Storm Surge Analysis to determine the predicted
hurricane loss attributable to storm surge and paid
by flood insurance compared to wind alone
• A Natural Catastrophe Analysis to estimate actual
probable losses and evaluate options for insuring
them
y:Jpnu.,iy it.21
2
1/21/2015
Vulnerability Study
Study design completed by ARA
• Characteristics that impact building wind
resistance identified
• Survey tool created for use in the field
• Properties to be inspected segmented into 32
strata based on
Age of home
• Construction type
■ Distance from coast
Slide 5
FIRM Vulnerability Study
Verification of building stock strength
through inspections nearing completion
• Goal of 704 homes to be inspected to reach
95% confidence level overall
✓710 homes inspected to date
✓5 more homes scheduled for inspection
✓30 of 32 strata "closed"
o "Open"strata (those strata where the goal number of
homes could not be inspected) will result in <95%
confidence level in results for those strata, and
potentially no adjustment to predicted
risk/vulnerability in those strata
slick(
3
1/21/2015
'RIVA [Inspection Challenges
Scheduling
Homeowner reluctance to participate
• Protection of privacy
• Fear it may lead to higher premiums
• Fear it may alert "authorities" to
unpermitted work
Properties are identified by an unique, blind
number in the analysis. Data is not shared by
address with Citizens, any other insurance
company nor any governmental entity.
,ary 2015 B000 Updat
onsequences of
MU Inspection Challenges
Ten months of time added to project
schedule
$45,000 out of FIRM budget to encourage
volunteers
REDUCE INSURANCE PREMIUMS PROJECT
• Radio spots
.,N viuu
• TV spotsw_,
.a,.aa000w to too IN..wn....aa thaw .w,...K..w�wm«
.
Mailings OS rest nn..,a« .d�« .«
e..« n ..,. « o.•
re•"at...,or ,..�
Call(305)294.3076 or emad RIPP@Rrmkeys.os$today
•
Phone calls ,^a.N«en<.rw.«a..<ome..ea«+uM ar.or m.s<.a eeaa,n o,avc•
Eska II Ng imeilewer whoa kepal
Slide 8
4
1/21/2015
'Vulnerability Study
PA , Next Steps
Completion of remaining inspections
• Should wrap up by end of this month
Quality control
• Review of completed inspection reports for
accuracy and thoroughness
• Re-inspection of some homes may be required
• Develop protocol to deal with missing data
Share results with homeowners
confidentially
ulnerability Study:
Shutter Analysis
Will not be completed
• Too many shutter variations
Homeowners may submit custom shutters for testing
• Unforeseen expenses with basic study
TIiFI
171
1/21/2015
Vulnerability Study:
PRM 'Mitigation Form Update
Current wind mitigation form does not
account for Monroe County realities
Will be designed based on analysis of
data from larger Vulnerability Study
$30,000 funding commitment from BOCC
Coordinating through FIRM with ARA, OIR
and Rep. Raschien
RIPP: Component Two
Storm Surge Analysis
• This consists of running the Citizens' book of
business against several approved models
with storm surge "turned on"
• Will include elevation data for Monroe
County , Storm Surge Defined
• Will consider past losses 4:
TOW 1IDE s we,otal war I.S
.aaur+umcd 4.•e.im wry.
r
6
1/21/2015
RIPP: Component Three
Natural Catastrophe (Nat Cat) Analysis -
conducted by a Willis risk analytics team
experienced in natural catastrophe analysis
• Information Gathering
• Risk Modeling and Loss Forecasting
• Existing Risk Retention and Insurance Review
• Sustainable, Optimized Risk Financing Planning
• Risk Retention, Self Insurance and Reinsurance
Structure Recommendation
FIRM Flood
4RIVA Insurance Efforts
Support HR 141 , Flood Insurance Premium
Parity Act extending HFIAA savings to
• Commercial properties
• Second homes which homeowner inhabits for
some portion of the year
Hope to add an amendment to allow same premium
savings to second homes not occupied by homeowner
IF those homes are rented more than 30 days/year to
workforce (Rep. Curbelo?)
Look to 2017 re-authorization of NFIP and
propose more lasting improvements
Mir
7
1/21/2015
FIRIA More FIRM News
FIRMKeys established
• Focus on outreach, education and mitigation
May earn points in Community Rating System (CRS)
• 501 (c)(3)
• Donations are tax-deductible
FIRM PAC being created
• Lobbying arm of FIRM
• 501 (c)(4)
• Donations are not tax-deductible
2015 BOCC Update c 15
?Ma FIRM Annual Meetings
MARATHON KEY LARGO
Tuesday, February 3 Tuesday, February 17
5:30 to 7:00 p.m. 5:30 to 7:00 p.m.
Marathon Government Center Nelson Government Center
EYS KEY WEST
Wednesday, February 11 Tuesday, March 3
Noon to 1:30 p.m. 5:30 to 7:00 p.m.
Boondocks Harvey Government Center
Summer 2013 U 1 t,. 15
U
8
1/21/2015
IRM
t ' ' , , Board of Directors
Mel Montagne / President Theresa Faber
Heather Carruthers / Vice President Robert S. Gold
Phil Wilson / Treasurer Michael Kiraly
Carol Schreck / Secretary Stephen Russ
John Barrett Peter Rysman
Ava Bianchino Joe Walsh
Lee Cummings Michele White
Kate DeLoach
Laura Burchard / Administrator
David Lybrand / E-Media Guru
Annalise Mannix / Project Manager and Consulting Engineer
fide 17
ARM Questions?
,n74 ,
, ,
1/21/2015
PJRta. Thank you!
FAIR INSURANCE RATES IN
MONROE
422 Fleming Street
Key West, FL 33040
(305) 294-FIRM (3476)
www.FIRMkeys.org
admin®FIRMkeys.org
15 BOCC update
10