AON RISK INSURANCE SERVICES WEST, INC

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AON The projected losses paid are the claim disbursements during each fiscal year from 2024/25 through 2025/26, regardless of accident or report date. The amounts are limited to the self -insured retention. 4. Allocate Premium. Calculate premium contribution by City Department for 2024/25. 5. Affirm GASB Statement No. 10. Provide a statement affirming the conclusions of this report are consistent with Governmental Accounting Standards Board (GASB) Statement No. 10. These actuarial services will result in the production of the following deliverables: The conclusions of our work will be in a written report for Client. The report will be designed to be easily understood by non - actuaries. [twill contain a technical section with sufficient information to support all conclusions and facilitate future analysis. Project Approach Submit a written data request to Client. 2. Gather and compile data provided by Client. We will review the data for reasonableness. Anomalies(if any) will be identified. If requested, we can obtain data dfrectly from the claims administration firm(s). 3. Discuss large Individual cialms with Client. Large claims can have a disproportionate impact upon the actuarial analysis. We want to be certain we fully understand the large claims. 4. Develop estimates of claim costs for 2024/25 and 2025/26. The estimates will be based on Client's own data to the extent it is a good predictor of future activity.To the extent Client's loss data is not a good predictor, our projections will reflect other similar programs with which we are familiar. Based on our experience, we have found that insurance industry statistics are often not applicable to public entities. This is because insurance industry statistics reflect a wide range of diverse risks (public entities are much more homogeneous). Public entities tend to manage claims very carefully. Therefore, reporting and payout patterns differ from insurance industry statistics. For the above reasons, we will apply insurance industry statistics judiciously. Our estimates will be developed based on generally accepted actuarial practices and will beconsistent with GASB Statement No. 10. We will consider at least the following actuarial methodologies: ■ Paid loss development Reported incurred loss development ■ Case reserve analysis ■ Reported claims development ■ Frequency and severity analysis ■ Loss rate analysis Aon Proprietary and Confidential Prepared for: The City of Santa Ana