14 Regulated Utilities 82,000 GWh 126 Generating Locations 44,000 MW Capacity Nearly 500 Generating Units Serving 100 Million Customers 15 Distribution Companies Providing Service to 11 Million Customers 2005 Revenues Reached $11.1 Billion 30,000 People Employed at AES
What is AES Global Insurance
Company (AGIC)
AGIC is a Captive Insurance Company
What is a Captive Insurance Company? A legal entity (a company) whose charter permits it to offer insurance to its parent or sister subsidiaries in return for premiums. Why does AES have a Captive Insurance Company? General dissatisfaction with existing insurance coverage and costs. Provide insurance for risks which may not be normally insurable. Ability to Manage claims process to ensure fair adjustment and Prompt payment to AES Facilities 2
AES / AGIC Introductions and Roles
Joe Meaney Director of Insurance and Risk Management &
President of AES Global Insurance Company (AGIC)
John Reiter Manager of Loss Control & Senior Vice President of
AES Global Insurance Company (AGIC)
Bob Daniels Manager of Loss Control & Vice President Of AES
Global Insurance Company (AGIC)
Matt Roach Shared resource for Performance Group and
Insurance. financial operation coordination with AES businesses on premium and other related issues 3
How Does AGIC Operate
Very Similar to a Traditional Insurance Company
Access the Risk (Underwriting) Charge Premiums Based on Risk Issue Policies Reinsure - Sharing the risk by insurance companies; part or all of the insurer's risk is assumed by other companies in return for part of the premium. (AGIC annual loss exposure is limited to the first 20 Million USD) Invest Premiums Pay Claims Provide Loss Control Services 4
AES / AGIC Loss Control Program
Why is there a Loss Control Program?
Calculated annual loss potential to AES > $100 million USD
deductibles for all businesses
$20 million at risk in the AES Global Insurance Company (AGIC) does not include actual losses below deductibles Loss history for the past 5 years has shown an upward trend Protect Stakeholders (AES People, Customers, Share Holders, Insurers) Used in Underwriting (+/ 10% Annual Premium) Just Good Business
AGIC Property Loss Control
Assessments
Global Risk Consultants (GRC)
AGIC/AES Eyes and Ears Perform Property (Fire) and Boiler & Machinery (B&M) Assessments Larger Facilities Annual both Property (Fire) and Boiler & Machinery Smaller locations Every other year combined Property (Fire) and Boiler & Machinery
AES/AGIC Loss Control Program
Identify and Understand the Risks
Respond to the Risks
Identifying The Risk
Understanding the Risk
Understanding The Risk
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Understanding The Risk
753 Total Boiler/Machinery
Recommendations 232 31% Address High Priority Human Element Conditions 274 36% Address Electrical Systems
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Responding To The Risk
Generate Site Specific Loss Prevention Recommendations Contracted The Appropriate Expertise for Educating Our Personnel DGA Training Developed And Implemented The Tools And Personnel For Accurately Identifying And Responding To The Risks Within Our Transmission And Distribution Companies Distribution Company Assessment Infrared Scan Maintain Involvement And Support Of Our Corporate Programs Designed To Reduce The Risk Transformer Contingency Program 12