Risk Analysis Services (RAS) helps level the playing field in the insurance marketplace!

By Alan B. Cantor

Medical Association with 25000 Members’ Malpractice Coverage 

When market conditions and participants change are you prepared and nimble enough to improve your position? 

Imagine a state medical association with 25 years and tens of thousands of physicians’ medical malpractice claims experience. Instead of a slow Thanksgiving week with a list of renewal notices, the association risk manager received a notice of cancellation. Their malpractice carrier was terminating the association’s account. Twenty-five thousand physicians in the State of New York needed a new malpractice carrier urgently

As December 31 coverage termination date approached, Alan Cantor, the analyst for the Medical Association’s broker, poured over reams of data. He researched and validated the quality of the data to assure its integrity prior to analysis, including consulting with defense attorneys for selected cases. He performed loss development analyses, based on multiple subsets of the data and for the overall aggregate data: numbers of procedures by type, cases by specialty and subspecialties, comorbidities and combination-claims with multiple surgeons and anesthesiologist. 

Cantor’s work was so scrupulously organized that a reader of the final report could trace each thread of the analyses from Validated Source Data (Loss and Exposure) to Loss Development, to Loss Forecasting (Regression-Trend Analysis) to projected losses and cost, including projected cash flows and discounted future cash flows. 

The selected projected results were based on those component analyses with the highest correlations and lowest volatilities. Future losses were projected ahead five years. When the projections results were compared to the actual results 6, 7 and 8 years later, Cantor’s projections were ½ of 1 percent off the actuals. 

The systematic analysis offered by Risk Analysis Services LLC features the same level of modeling that can be applied to improve your cost of risk, risk transfer and management today.