These FAQs (frequently asked questions) should help you better understand what Risk Analysis Services does for its clients:
How do your services work?
We work with clients to provide risk analysis that help them make smarter decisions. You provide us your past risk history, and we do the analysis. We can help interpret the analysis, and make suggestions how to use it to help reduce future potential losses.
How many years of data history should I preferably provide for a good loss projection?
You must provide at least 3 years of data, and you should typically provide 4 to 6 years of history to increase the chance for a better projection.
Can you always provide good loss projections with 4 to 6 years of data?
If there are trends in the data, then the analysis will accurately and graphically show them.
Can you estimate my frequency of claims?
Yes. We can estimate your frequency of claims and your frequency rate of claims (per appropriate exposure base).
How can you lower my losses? We can often lower future losses when we are able to find trends in your data. These shed light on adverse experience sources, which lead to better loss control, risk reduction policies and procedures. These factors can often reduce future losses.
How can you lower my cost of risk? Three basic ways: 1) Identify sources of frequency and/or severity of losses. These lead to focused loss-control and risk-reduction policies and procedures; 2) Provide a more accurate and enterprise-specific loss trend picture to prospective insurance company underwriters so that they can confidently lower your rates and cost; 3) (related to 2) – Release you from the “conspiracy of averages” where your actual empirical risk trend components (including LDF’s) are more favorable than industry averages. This way you can benefit from reduced rates, based on your own rigorous systematic analysis; 4) Reduced risk management administration costs – your recurring risk analysis with C&C and our affiliates simplifies your risk evaluation analysis and data management time and expense.
What specifically do I need to provide to you?
- For Loss Development (LDF): Successive valuations of a given year’s reported losses on a common anniversary date, for at least 3-years of incurred loss data, and preferably for 4-6 incurred loss years; we also need to have individual large loss amounts (typically losses greater than $50,000 per occurrence, but the level may vary on a case-by-case basis);
- For Frequency Loss Development (FLDF): Successive valuations of a given year’s reported number of claims on a common anniversary date, for at least 3-years of incurred loss data, and preferably for 4-6 incurred loss years;
- For Paid Loss Development (PDF) – (which produces Loss Payout Development (LPD)): Successive valuations of a given year’s paid losses on a common anniversary date, for at least 3-years of paid loss data, and preferably for 4-6 paid loss years – if appropriate and available;
- For Loss Forecasting: at least three successive years (preferably 4-6) of total incurred incurred loss amounts and numbers of claims, corresponding exposure data plus data for current year and next year.
- For Risk Financing (RF): organizational effective tax rate, discount rate (cost of capital), loss payout development (for SI, ILR, PLR and other loss-sensitive plans [or approval of standard LPD]), other data elements – cost components where needed for specific RF plans:
- For WC: number of employees or payroll;
- For Auto: number of vehicles or vehicle miles [if fleets of trucks and fleets of cars, corresponding data for each];
- For GL: sales [if multiple divisions or business units, data by business units and locations, if available].
What will I receive back from you? 1) Incurred Loss Development Factors, 2) Frequency of Loss Development Factors, 3) Paid Loss Development Factors, 4) Projected Total Losses, Projected Frequency Rate of Claims, Projected Frequency of Claims, 5) Discounted After Tax Cash Flow. All results include respective graphs and complete audit trail of component analyses and statistics.
Can you explain the results to my broker? Yes. We can work with your broker to support his/her efforts to obtain the best possible outcome for financial management of your risks.
Can you explain the results to my insurance company? Yes. We can walk them through the rationale for our findings.
Can you teach my staff how to get the information I need? Yes. We can also help them develop policies and procedures to make the process as efficient as possible. This may include working with your existing data management and collection tools and systems and/or helping to obtain and implement enhanced and improved systems.
Can you find out trends by location? Yes. Where appropriate and where indicated by the data, we may look at location by location analysis in addition to enterprise-wide analysis.
Do you ever work for other risk analysis organizations? Yes. We have experience working with other risk analysis organizations.
How quickly can you get me the results? From the time we receive the data required for your analysis, depending on your requirements, we can often provide results within 3-5 business days. Depending upon the number of analyses requested and the complexity of the data, it may take longer to process all of your results.