City of Houston Property Insurance Renewal Overview

City of Houston is renewing its property insurance with McGriff, Seibels & Williams of Texas, Inc. The total insured value is $11.06B covering 2,840 locations. The proposed premium is $13.45M with key locations like George R. Brown Convention Center and Hobby Airport. The presentation includes details on the insurance value distribution by fund, premium payments, and five-year loss history for various property damages and events.

• Houston
• Property Insurance
• Renewal
• McGriff Seibels Williams
• Premium

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1. City of Houston Property Insurance Renewal Presentation for: Budget & Fiscal Affairs Committee March 6, 2018

2. City of Houston Annual Property Insurance Renewal Process Broker of Record: McGriff, Seibels & Williams of Texas, Inc. Contract with City of Houston since September 1, 2014 Markets the City s Insurance to National and International Markets via RFP prepared by the COH: Request for primary coverage for City properties ($11B TIV) Included request for quotes for excess coverage for HAS, PWE & HFC Included request for parametric options for catastrophic events Proposals solicited from 47 national and international carriers Executive Staff Johnny Fontenot, Executive Vice President Robert Waggoner, Senior Vice President Public Entity Division 2

3. COH Property Overview Current Renewal Total Insured Value: $10,973,243,336 Locations: 2,840 Premium: $9,368,005 Total Insured Value: $11,056,240,294 Locations: 3,303 Proposed Premium: $13,454,155 Highest valued locations: George R. Brown Convention Center - $480,333,387 Terminal D, IAH - $372,555,593 Terminal C, IAH - $306,760,882 Hobby Airport - $295,017,564 Terminal A, IAH - $236,735,137 Wortham Theater - $208,012,148 3

4. Total Insurance Value: $11.06B Percentage by Fund 2018-2019 39.32% Public Works & Engineering 18.62% General Fund 8.49% Houston First Corporation 0.02% Grant Fund 31.52% Houston Airport System 2.02% Special Fund 4

5. Premium Paid vs. Five Year Loss History Premium and Policy Limit Information Property Loss Information Policy Year Total Insured Value Claim Amount Claim Payment Premium Paid Claim Deductible 4/1/2014 $ 10,851,048,689 $ 10,686,433 N/A $ 9,381,072 Multi Service 4/1/2015 $ 10,265,447,169 $ 1,216,127 $ (500,000) $ 716,127 Center Memorial Day Flood (Estimate) $ 7,489,548 $ (2,500,000) $ 4,989,548 $ 9,516,903 Walker Water 4/1/2016 $ 10,661,144,930 $ 589,279 $ (500,000) $ 89,279 Damage $ 9,368,005 Hurricane Harvey (Estimate) 4/1/2017 $ 10,973,243,336 $106,800,000** $ (15,000,000) $ 100,000,000 $ 9,674,025 Walker Water *10/4/2017 $ 10,973,243,336 $ 650,000 $ (500,000) $ 150,000 Damage (Estimate) TOTALS $ 48,626,438 $116,744,954 $ (19,000,000) $ 105,944,954 *Flood Reinstatement **Damages subject to insurance are estimated >$329M; however, damages exceed the maximum flood limit of $100M; Non-flood damages for insurance purposes are currently estimated at $6.8M 5

6. 18-Year Loss History Property Loss Information Policy Year 4/1/2000 Tropical Storm Allison Claim Amount 33,642,554 $ Claim Payment 32,642,554 $ Claim Deductible (1,000,000) $ 69th St. WWTP $ 4,786,622 (1,000,000) $ $ 3,786,622 4/1/2008 Hurricane Ike $ 31,400,000 (20,000,000) $ $ 11,400,000 4/1/2015 Multi Service Center $ 1,216,127 $ (500,000) $ 716,127 Memorial Day Flood (Estimate) $ 7,489,548 (2,500,000) $ $ 4,989,548 4/1/2016 Walker Water Damage $ 589,279 $ (500,000) $ 89,279 4/1/2017 Hurricane Harvey (Estimate)* 106,800,000 $ (15,000,000) $ 100,000,000 $ Walker Water Damage (Estimate) $ 650,000 $ (500,000) $ 150,000 186,574,130 $ (41,000,000) $ 153,774,130 $ *Damages subject to insurance are estimated >$329M; however, damages exceed the maximum flood limit of $100M; Non-flood damages for insurance purposes are currently estimated at $6.8M 6

7. Hurricane Harvey Damages City of Houston Facilities: Top 10 Damage Estimate As of 03/01/2018 Dept/Org Location Description HFC Wortham Theater Center $ 96.0M HFC Civic Center Parking Garage $ 41.1M HFC Tranquility Parking Garage $ 39.8M PWE Kingwood Central Waste Water Treatment Plant $ 18.8M MCD Municipal Courts Bldg. $ 14.1M HPD Central Police Station Complex (Riesner) $ 12.5M PWE 69th Street Waste Water Treatment Plant $ 10.0M GSD City Hall $ 9.8M PWE Sims Bayou Waste Water Treatment Plant $ 8.2M PWE Fresh Water Supply District #23 $ 8.0M 7

8. Proposed Carrier Participation $175M Policy Limit Layered Structure Includes $175M Flood Aggregate 4th Excess Layer $25M in excess of $150M 3rd Excess Layer $50M in excess of $100M 2nd Excess Layer $50M in excess of $50M 1st Excess Layer $25M in excess of $25M Primary Layer $25M 8

9. Property Policy Renewal Comparison Coverage Current Proposed Total Insured Value $10,973,243,336 $11,056,240,294 Policy Limit $175M $175M Flood Sub-Limit $100M $175M Deductibles All Other Perils $500,000 $500,000 Named Storm Wind Min $2.5M / Max $15M Min $2.5M / Max $15M Flood Min $2.5M / Max $15M Min $2.5M / Max $15M Combined Wind/Flood Max $15M Max $15M PREMIUM $9,368,005 $13,454,155 9

10. Proposed Commercial Property Policy Premium Allocation 2018 Expiring Policy Premium Allocation 2018 Renewal Premium Allocation Total Insured Value 2018 Allocation Percentage Fund EnterpriseFund Houston Airport System $3,484,656,068 31.518% $2,980,150 $4,240,481 Houston First Corporation Public Works & Engineering Enterprise Fund Subtotal $938,947,415 8.492% $801,808 $1,142,527 $4,347,643,091 39.324% $3,723,499 $5,290,707 $8,771,246,574 79.334% $7,505,457 $10,673,715 General Fund $2,058,439,656 18.617% $1,662,165 $2,504,762 Grant Fund $2,690,990 0.024% $2,342 $3,229 Special Fund $223,863,074 2.025% $198,041 $272,449 Totals $11,056,240,294 100.000% $9,368,005 $13,454,155 10

11. Terrorism Insurance No changes in terms and premium $250M Annual Policy Aggregate Loss Limit $25M Annual Aggregate Nuclear, Chemical, Biological, and Biochemical sub-limit Deductibles Property Damage and Business Interruption Combined $500,000 Per Occurrence Nuclear, Chemical, Biological, and Biochemical 48-Hour waiting period in respect of Business Interruption Premium - $498,225 Expires: April 1, 2019 11

12. Questions? 12