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AES Businesses & AES Global Insurance

Company (AGIC)
2006 - 2007

Loss Prevention on a Global Scale

Robert Daniels

AES Is A Global Company

14 Regulated Utilities 82,000 GWh
126 Generating Locations 44,000 MW Capacity
Nearly 500 Generating Units Serving 100 Million
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
Why does AES have a Captive Insurance Company?
General dissatisfaction with existing insurance coverage and
Provide insurance for risks which may not be normally
Ability to Manage claims process to ensure fair adjustment
and Prompt payment to AES Facilities

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

financial operation
coordination with AES businesses on premium and other related

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

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,
Used in Underwriting (+/ 10% Annual Premium)
Just Good Business

AGIC Property Loss Control


Global Risk Consultants (GRC)

AGIC/AES Eyes and Ears
Perform Property (Fire) and Boiler & Machinery (B&M)
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


Understanding The Risk

753 Total Boiler/Machinery

232 31% Address High Priority
Human Element Conditions
274 36% Address Electrical


Responding To The Risk

Generate Site Specific Loss Prevention Recommendations
Contracted The Appropriate Expertise for Educating Our
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