2019 PAL/PLL/Misc Binding Authority Narrative

Thanks to the support of underwriters, Dominion's binding authority, renewing March 1st of each year, continues to enjoy profitable acceptance across the United States despite in roads made by Jameson, a major competitor, with the National Association of Patent Practitioners (NAPP) which offers Patent Practitioners Liability (PPL) policies to its members. In response to these competitive forces, we are in the process of launching an automated account recovery system by which each patent practitioner prospect in our database will receive renewal premium indications at optimal intervals designed to coincide with their current policy expirations. We will emphasize the two two recently enhanced PPL product offerings: The Patent Agent Liability (PAL) policy and the Patent Lawyer Liability policy.

The combined PAL/PLL book, currently sits at $450,247 down from $578,339 in gross written premium from last year's binding authority and from from $667,813 for the prior year. The policy count is also down to 168 from 179 last year and a high of 216 the year before. As is apparent from the foregoing, the rate of loss to Jameson is slowing substantially. Moreover, the premium loss is exaggerated by a reduction in the average per policy premium, which has dropped from $3,230 last year to $2,680 this year. This reduction is due in large part to the premium discounts introduced to retain the book under the current heavy competitive pressures. Notwithstanding these setbacks, in light of the new marketing system we are implementing, we remain confident that we will be able to begin growing the book over the course of the next year.

Although the PPL book has experienced tremendous profitability over the past 20 years, this last year we did see uncharacteristic claim activity amounting to $299,000 in damages and $10,454 in defense costs. The insured implicated in that claim has been non-renewed and moved to another program. We anticipate that this program will resume its otherwise profitable trend moving forward.

The LPL book has dropped as well to 2016 levels of around $40,000 from a high of about $70,000 last year. The LPL writings consist exclusively of prior PPL insureds whose practices have developed to the point that LPL coverage is needed.

The remaining lines, AML, IBL, MPL and LPL, stand at a combined total gross written premium of $45,705, about $10,000 lower than last year. We believe that perhaps the addition of the Estate Lawyers Liability (ELL) product we have been discussing would spur growth in this area.

We genuinely appreciate underwriters continued support and look forward to improving the scope and profitability of all the lines supported under this binding authority moving forward.