Contingencies Online - July/August 2012

Optimum Re Insurance Co. (ORIC)

1345 River Bend Drive Suite 100

Dallas Texas 75247

PHONE: 214-528-2020

FAX: 214-528-2777

Website: www.optimumre.com
CONTACT: Gord Gibbins
Senior VP Development
gord.gibbins@optimumre.com
613-476-0219 or 613-242-9913

Overview

Optimum Re Insurance Company (ORIC) is the U.S. subsidiary of Optimum Re Inc, a member of the Optimum Group which celebrates its 43th anniversary in 2012. ORIC is proud to be celebrating its 25th anniversary this year. Its home office is located in Dallas, Texas. ORIC is active in most US states, Puerto Rico and The Caribbean. ORIC prides itself in its dedication in helping small to mid-size insurance companies with the mission of supporting their development, while at the same time, having recently (2004) broadened its scope by providing life and critical illness reinsurance services to large companies as well. ORIC provides a vast range of services and support—from turnkey products that can open new market opportunities to con-sulting-style support for companies entering the critical or chronic illness marketplace—in addition to traditional individual reinsurance products such as life, and bulk accidental death and dismemberment (AD&D). The company is well-established as a leading reinsurer of critical illness insurance. The key to its successful growth has been the constant attention to customer needs and service and the development of close long-term partnerships.

History

The Company was founded in 1978 and acquired by the Optimum Group Inc in 1987. Immediately ORIC set a strategy to expand its reinsurance client base. Its innovative marketing approach allowed for rapid but controlled growth right from the start. In 1991, ORIC acquired the reinsurance of AGC Life Insurance Company of Nashville, Tennessee. In 1998, 1999, 2000 and 2005 further acquisitions of major blocks of reinsurance from competitors were finalized. This acquisition strategy accelerated the company’s growth and commitment to the market. ORIC’s 2004 expansion into the larger company market and its dedication in critical illness development and leadership since 2000 are further natural expressions of the company’s growth and service strategy. ORIC continues to increase its client base and continues to look for reinsurance acquisitions and areas of growth.

Financial Strength

With its strong growth and attention to sound financial management, the capital and surplus of Optimum Re Inc. has grown to over 200 million on a US GAAP basis with total assets exceeding 1. 8 billion. The revenue for Optimum Group climbed 6%. Quoting Mr. Jean-Claude Page, President and COO “The Group has produced a return of 12.6% , an excellent performance in the current financial environment”. Optimum Re’s financial results for 2011 were excellent with continued growth in revenue premiums and capital and surplus. On a Stat basis our RBC ratio increased to 558%. While our sales volumes were flat, the substantial decrease in the market showed an increase in life reoccurring market share. Significant gains in new treaties (or increased shares in existing) in all markets were also made in 2011. Optimum Re has an A-(Excellent) rating from AM Best.

Lines of Business

◗ ◗ Individual life re insurance including final expense

◗ ◗ Individual and Group Critical Illness

◗ ◗ Accidental Death (ADB and AD&D)

◗ ◗ Specialty Risk (Group Life)

◗ ◗ Catastrophe Coverage

Service Offerings

◗ ◗ Actuarial pricing—life, critical illness, turnkey, catastrophe coverage and blocks of existing business

◗ ◗ Administration—Individual cession administration at no extra cost

◗ ◗ Claims—Assistance in claim review and analysis and prompt handling (Life, CI)

◗ ◗ Marketing—Dedicated sales team with underwriting and actuarial experience (large and small markets)

◗ ◗ Research and development—New research available to clients

◗ ◗ Risk management—Offering special reports for clients to verify retention, auto limits, and jumbo risk exposure

◗ ◗ Underwriting—International underwriting network; 24 hour time service on facultative quotes; Second opinion; Guidelines design and application review; Web-based underwriting manual for life and older age products; MIB support; 90 day follow-up listing; Training and educational seminars; Unique Web-based Critical Illness Underwriting Manual; CI underwriting training and support

2011 Flaspohler Results

In 2010 ORIC conducted its first client survey and also participated in the 2011 Flaspohler survey. Both surveys have been used to identify strengths to build on and areas to improve. Highlights of the 2011 Flaspohler include:

◗ ◗ In the overall analysis ORIC placed in the top 5 reinsurers in 6 of 10 ‘best at’ questions

◗ ◗ ORIC overall results for all 10 ‘Service and Capabilities’ and Financial measures increased substantially

◗ ◗ Optimum was 1 of only 4 reinsurers that had a positive ‘net promoter’ score

◗ ◗ Our clients ranked us 2nd overall in ‘Service and Capabilities’ and #1 has the ‘best’ reinsurer.

World Class Underwriting Seminar

Our 2011 Underwriting Seminar, held in our new office, was again a tremendous success. Plans are under way for our 2012 seminar tentatively set for November 4-7 in Dallas.

New Capacity for the Market and Jumbo Cases

In 2011 announced a 35+% increase in our automatic capacity. In addition we now have significant( 4+million) “ 24 hour” capacity for cases with total lines exceeding the jumbo limit-including 2 million new capacity to the N.A. market. We continue to search the market for our clients to find the maximum capacity available.

New Life Underwriting Manual Introduced May 7th 2012

At the annual AHOU meeting clients were treated to demos of our new completely redesigned and revised life underwriting manual. Comments were extremely favourable with 1 client describing the manual as “awesome”.

ORIC Wins Award

On April 30th the President and COO of the Optimum Group, Mr. Jean-Claude Page, announced that ORIC had won the 2011 Optimum Enterprise Award for exceptional performance. In particular he noted ORIC’s 13% growth in gross premium in 2011 and the 5year average growth rate of 17%.He also referenced their substantially increased profitability for 2010 and 2011.