Underwriting 101

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Introduction

• Underwriting 101
• 2004 Accident Review
• Comparison of Accident Rate to Physical Damage
  Rate
• Helicopter Accident Rate Goal
• Economic Impact of Achieving Goal

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• Aviation Underwriting
• Appling knowledge of the aviation industry in
  order to pre-qualify and evaluate risk using
  exposure and operation analysis to develop
  pricing models that consistently produce the
  expectation of underwriting profitability.

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Keys to Effective Underwriting

• Risk Selection
• Mathematics
• Understanding cost
• Rate adequacy

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Benchmarking

• Exposure Rating
• Probabilistic model
• Deterministic model
• Catastrophic exposure
• Experience Rating
• Accident history
• Trend analysis
• Burning cost

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2004 U.S. General Aviation Active FleetBy
Aircraft Type(216,112 Total Units)
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2004 U.S. General Aviation Accident
Statistics25,900,000 Flight Hours

• Accidents 1614
• Fatal Accidents 312
• Fatalities 556
• Accident Rate 6.22
• Fatal Accident Rate 1.20
• Fatalities Rate 2.15
• Rate per 100,000 hours

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2004 U.S. Civil Helicopter Accident
Statistics2,225,000 Flight Hours

• Accidents 180
• Fatal Accidents 33
• Fatalities 68
• Accident Rate 8.09
• Fatal Accident Rate 1.48
• Fatalities Rate 3.06
• Rate per 100,000 hours

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2004 U.S. Civil Turbine Helicopter Accident
Statistics1,740,000 Flight Hours

• Accidents 89
• Fatal Accidents 21
• Fatalities 51
• Accident Rate 5.11
• Fatal Accident Rate 1.21
• Fatalities Rate 2.93
• Rate per 100,000 hours

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2004 U.S. On Demand Air Taxi Accident
Statistics3,070,000 Flight Hours

• Accidents 68
• Fatal Accidents 24
• Fatalities 65
• Accident Rate 2.21
• Fatal Accident Rate 0.78
• Fatalities Rate 2.12
• Rate per 100,000 hours

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2004 U.S. Corporate/Executive Accident
Statistics7,560,000 Flight Hours

• Accidents 7
• Fatal Accidents 1
• Fatalities 10
• Accident Rate .093
• Fatal Accident Rate .013
• Fatalities Rate .132
• Rate per 100,000 hours

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2004 U.S. Air Carrier (CFR-121) Accident
Statistics17,575,000 Flight Hours

• Accidents 28
• Fatal Accidents 2
• Fatalities 14
• Accident Rate 0.159
• Fatal Accident Rate 0.011
• Fatalities Rate 0.080
• Rate per 100,000 hours

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Comparison2004 U.S. General Aviation to Civil
Helicopter Accident Statistics

• G.A. Helicopter
• Accidents 1,614 180 11.15
• Fatal Accidents 312 33 10.57
  
• Fatalities 556 68 12.23
• Accident Rate 6.22 8.09 30
• Fatal Accident Rate 1.20 1.48
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• Fatalities Rate 2.15 3.06 42
• Rate per 100,000 hours

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Comparison2004 U.S. General Aviation to Civil
Helicopter Accident Statistics(Excluding Piston
Helicopters)

• G.A. Helicopter
• Accidents 1,523 89 5.8
• Fatal Accidents 300 21
  7.0
• Fatalities 539 51 9.5
• Accident Rate 6.00 5.11 -15
• Fatal Accident Rate 1.18 1.21
  2.5
• Fatalities Rate 2.12 2.93 38
• Rate per 100,000 hours

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Comparison2004 Accident Rate vs. Physical Damage
Rate
Accident Rate
Physical Damage Rate
5.11
3.00
2.21
0.75
.27
.159
.15
.093
On Demand Air Taxi
U.S. Air Carrier
Corporate/Executive
Turbine Helicopter

• Accident Rate per 100,000 hours
• Physical Damage Rate per 100 of Insured Value

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2015 U.S. Civil Turbine Helicopter Accident Rate
Goal

• Accidents 18
• Fatal Accidents 4
• Fatalities 10
• Accident Rate 1.02
• Fatal Accident Rate .242
• Fatalities Rate .586
• Rate per 100,000 hours

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Economic Impact

• Direct
• Increase in Capacity
• Lower Insurance Rates
• Coverage Expansions
• Indirect
• Deductibles/Betterment
• Productivity
• Public Perception

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