Understanding Policy Programs and the Policy Tower

Managing a complex insurance program with multiple layers, carriers, and attachment points can be difficult to track using just spreadsheets. The Policy Programs module in Aclaimant provides a visual "Safety Net" view, allowing Risk Managers to see how all their policies stack together to protect the business.

This article will guide you through setting up a program, adding policies, and viewing your Policy Tower (Mud Map).

What is a Policy Program?

Instead of looking at one policy at a time, a Program looks at the "big picture." It groups your primary and excess policies together to show you exactly where your coverage starts, where it ends, and if there are any dangerous gaps in between.

Step 1: Set Up a New Program

First, you need to create the "folder" that will hold all your related policies (e.g., your 2024 Property Program or 2024 General Liability Program).

1. Navigate to the Policies tab in the main menu.

2. Select the Programs sub-tab.

3. Click + Create Program.

4. Fill in the Program Details, such as:

   • Program Name (e.g., 2024 Excess Liability Tower)

   • Coverage Line

   • Effective/Expiration Dates

   • Status

Step 2: Add Policies to the Program

Once your Program is created, you need to tell the system which individual policies belong inside it.

1. Inside your specific Program, look for the Policies in Program table.

2. Click Add Policy.

3. Select the policies from your existing Aclaimant records that make up this program.

4. Ensure the Attachment Point and Limits are filled out for each policy. This is what the system uses to build your visual map.

Step 3: View the Policy Tower (The "Mud Map")

After adding your policies, Aclaimant automatically builds a Policy Tower. This is a graphical representation of your insurance stack.

1. Click on the Visualization or Tower View tab within the Program.

2. How to read the Tower:

   • The Bottom: These are your "Primary" policies (the first ones to pay).

   • The Middle/Top: These are your "Excess" layers. They sit on top of the primary layers.

   • The Height: The vertical position shows the Attachment Point (when the policy starts paying).

   • Striped Blocks: If you see a striped or "hollow" area, it means you have Unplaced Capacity (a gap in coverage that needs a carrier).

Key Industry Terminology

• Limit
  • The maximum dollar amount an insurance policy or individual coverage layer will pay for a covered loss.
  • Example: A $350M limit means that, no matter how large the loss, the policy will pay no more than $350 million.
• Attachment Point
  • The dollar amount at which a policy or layer begins to pay for losses. Losses below this amount are not covered by the layer.
  • Example: A $250M attachment point means the insurance does not respond until total losses exceed $250 million. In “350M X of 250M,” the layer covers losses from $250M up to $600M.
• Deductible
  • The amount the insured party must pay out-of-pocket before their insurance responds. Applies to the total loss (ground-up), not just individual layers.
  • Example: If FM Global sets a $5M deductible, the insured absorbs the first $5 million of each loss before the insurer pays.
• % Share
  • The percentage of coverage within a layer taken on by a particular insurer. In large programs, a layer is often shared among several insurers.
  • Example: If Lloyd’s has a 10% share of a $100M layer, Lloyd’s is liable for up to $10 million of any loss in that layer. All insurer shares within a layer add up to 100%.
• Coverage
  • The specific events or perils an insurance program protects against, as detailed in the policy terms.
  • Example: A property insurance policy may include coverage for fire, flood, earthquake, and equipment breakdown—each as a separate covered risk.
• Layer
  • A band of insurance within the overall program, defined by its attachment point (where it starts) and its limit (amount it pays). Layers are stacked vertically to form a ‘tower,’ providing increasing limits of coverage.
  • A large property program may include 10+ layers to cover all desired risk.
  • The Underlying
    • The coverage or layer sitting directly beneath the current layer in the tower. Before a higher layer pays, the underlying one must be fully used (“exhausted”).
    • Example: If a layer attaches at $250M, the underlying includes coverage from $0 to $250M.
  • Exhausted
    • A layer is ‘exhausted’ once claims reach and use up its entire limit; after this, the next-highest layer begins to pay.
    • Example: If a $100M layer is exhausted, losses above $100M are paid by the next layer up.
  • Ventilated
    • A layer described as ‘ventilated’ has a gap—meaning it is not fully subscribed to by insurers, so a portion of risk within that layer remains uninsured. This exposes the insured to risk for that gap.
    • A ventilated layer is a red flag: the uninsured portion often falls back to the insured.
  • Part of
    • An insurer is ‘part of’ a layer when it takes a percentage share of that layer, rather than the whole layer. Describes co-insurance participation.
    • Example: Lloyd’s of London is ‘part of’ the $350M X of $250M layer at an 11% share.

Frequently Asked Questions

Q: I don't see the Programs tab. How do I enable it? A: Policy Programs must be enabled in Settings. Note that this module requires the Policy Complex module to be active to function correctly. Contact your Customer Experience Manager to get this enabled.

Q: Can I share this visual? A: Yes! You can export the Tower Visualization as a report to use in meetings or presentations to show exactly how the company is protected.

Need more help? Contact your Customer Experience Manager for a guided walkthrough of your first Policy Tower setup!