Insurance

12 Months Ended

Oct. 31, 2020

INSURANCE

We use a combination of insured and self-insurance programs to cover workers’ compensation, general liability, automobile liability, property damage, and other insurable risks. For the majority of these insurance programs, we retain the initial $1.0 million to $1.5 million of exposure on a per-occurrence basis, either through deductibles or self-insured retentions. Beyond the retained exposures, we have varying primary policy limits ranging between $1.0 million and $5.0 million per occurrence. To cover general liability and automobile liability losses above these primary limits, we maintain commercial umbrella insurance policies that provide aggregate limits of $200.0 million. Our insurance policies generally cover workers’ compensation losses to the full extent of statutory requirements. Additionally, to cover property damage risks above our retained limits, we maintain policies that provide per occurrence limits of $75.0 million. We are also self-insured for certain employee medical and dental plans. We maintain stop-loss insurance for our self-insured medical plan under which we retain up to $0.5 million of exposure on a per-participant, per-year basis with respect to claims.

We maintain our reserves for workers’ compensation, general liability, automobile liability, and property damage insurance claims based upon known trends and events and the actuarial estimates of required reserves considering the most recently completed actuarial reports. We use all available information to develop our best estimate of insurance claims reserves as information is obtained. The results of actuarial reviews are used to estimate our insurance rates and insurance reserves for future periods and to adjust reserves, if appropriate, for prior years.

Insurance Reserve Adjustments

Actuarial Reviews and Updates Performed During 2020

We review our self-insurance liabilities on a regular basis and adjust our accruals accordingly. Actual claims activity or development may vary from our assumptions and estimates, which may result in material losses or gains. As we obtain additional information that affects the assumptions and estimates used in our reserve liability calculations, we adjust our self-insurance rates and reserves for future periods and, if appropriate, adjust our reserves for claims incurred in prior accounting periods.

During the first and third quarters of 2020, we performed comprehensive actuarial reviews of the majority of our casualty insurance programs to evaluate changes made to claims reserves and claims payment activity for the periods of May 1, 2019, through October 31, 2019, and November 1, 2019, through April 30, 2020, respectively (the “Actuarial Reviews”). The Actuarial Reviews were comprehensive in nature and were based on loss development patterns, trend assumptions, and underlying expected loss costs during the periods analyzed.

During the second and fourth quarters of 2020, we performed interim actuarial updates of the majority of our casualty insurance programs that considered changes in claims development and claims payment activity for the respective periods analyzed (the “Interim Updates”). These Interim Updates were abbreviated in nature based on actual versus expected development during the periods analyzed and relied on the key assumptions in the Actuarial Reviews (most notably loss development patterns, trend assumptions, and underlying expected loss costs).

Based on the results of the Actuarial Reviews and Interim Updates, we decreased our total reserves for known claims as well as our estimate of the loss amounts associated with IBNR Claims by $36.6 million, $30.2 million of which relates to prior years, during 2020. In 2019, we decreased our total reserves related to prior year claims by $3.4 million.

Insurance Related Balances and Activity


(in millions)	October 31, 2020		October 31, 2019
Insurance claim reserves, excluding medical and dental	$	504.9	$	507.8
Medical and dental claim reserves	16.6		7.2
Insurance recoverables	70.1		64.5

At October 31, 2020 and 2019, insurance recoverables are included in both “Other current assets” and “Other noncurrent assets” on the accompanying Consolidated Balance Sheets.

Casualty Program Insurance Reserves Rollforward


	Years Ended October 31,
(in millions)	2020		2019		2018
Net balance at beginning of year	$	443.3	$	427.7	$	412.5
Change in case reserves plus IBNR Claims — current year	128.5		137.9		131.4
Change in case reserves plus IBNR Claims — prior years	(30.2)		(3.4)		10.2
Claims paid	(106.8)		(119.1)		(126.5)
GCA acquisition	0.2		—		0.1
Net balance, October 31(1)	434.8		443.3		427.7
Recoverables	70.1		64.5		73.7
Gross balance, October 31	$	504.9	$	507.8	$	501.4

(1) Includes reserves related to discontinued operations of approximately $0.5 million for 2020, $1.0 million for 2019, and $3.0 million for 2018.

Instruments Used to Collateralize Our Insurance Obligations


	As of October 31,
(in millions)	2020		2019
Standby letters of credit	$	143.6	$	141.0
Surety bonds	82.6		90.8
Restricted insurance deposits	0.7		0.8
Total	$	226.9	$	232.6