RiskMap® Loss Development Analyses
Information is power …
… and our proprietary RiskMap® software creates informative reports for decision-makers!
And our latest RiskMap® Loss Development (“LD”) system …
… raises the RMIS functionality to new levels!
The following business model has some inherent flaws:
In the absence of systematically documented and developed LDFs, prospective insurers often use generic industry or general coverage-based LDFs and apply them to your experience — which may significantly increase your costs.
“When in doubt, double the price” is a common unspoken guideline for too many underwriters. This is no way to do business because, on one hand, doubling the price may still be a money-loser for underwriters. Or, on the other hand, doubling the price might cost underwriters profitable business.
Isn’t this a better business model?!
It’s a fact: Relevant analysis of available data increases the ability to better understand, control and manage risks. Even otherwise well-managed organizations will benefit from generating their own Loss Development Factors (“LDFs”). And doing so in a recurring and efficient manner can help organizations take better control of their cost of risk.
RiskMap® LDFs can be generated on a recurring basis, such as quarterly or semi-annually, based on organizations’ historical data and experience. By doing this, greater understanding and control can be achieved, so you may, for example, more accurately account for material components of your budgeting and financial planning.
Our proprietary RiskMap® LD software, using your data, calculates loss development and loss payout factors, producing developed losses and developed inflation-adjusted losses. And it includes a clear and concise full audit trail of the entire process to generate the results described below, and more.
We require a minimum of 4 years of historical loss and exposure data.
The analysis reports we generate can only be as good as the data provided. Furthermore, careful interpretation of the reports is highly recommended.
RiskMap® Incurred Loss Development:
RiskMap® produces Loss Development Factors, which may be used to statistically understand the underlying patterns in the claims which may be insured. Management’s goals of safety and efficiency are revealed here and, drilling down via risk management techniques like Root Cause Analysis, management may achieve improved safety, efficiency, lower claims cost and higher profits.
RiskMap® is a PROVEN system to support changes in processes and procedures, while getting buy-in both at the executive and finance level and across HR, Training, Risk, Safety and operating departments.
RiskMap® Paid Loss Development
RiskMap® produces Paid Loss Development Factors, which show the pattern in paying your claims and the time it has taken to pay your existing claims. For your company, generally insurance premiums are collateralized at the start of each policy year. Actual claims payments occur over multiple years, starting after a loss is reported. You have a significant interest in how this process of paying claims is conducted. It affects your reputation. It also affects your balance sheet and your income statement – and it could mean customers or employees, or other stakeholders – have been injured and are awaiting resolution. Paid Loss Development is part of managing this.
Our Paid Loss Development reports can help you manage your relationship with your insurer and/or TPA – Third Party Administrator that handles your claims. With RiskMap® reports you can see, based on RiskMap® analysis of your loss data, how long your insurer is holding your funds to pay out your claims.
On a Paid Loss Retro program, for example, your balance sheet remains encumbered so long as claims remain open and not fully paid.
Shows analysis with individual year-to-year Loss Development Factors, Average Yearly Development Factors, Cumulative Development Factors, Standard Deviations, Coefficients of Variation (volatility) and Annual Cumulative Development Factor Percentages.
Incurred Loss Analysis: Latest Annual Valuation of Losses to which the calculated Loss Development Factors are applied, which produces the annual Developed Losses, to which Inflation Factors are applied, to produce the Annual Developed & Inflated Losses.
Loss Development Analysis Chart
Loss Development Factors Bar Chart
Cumulative Loss Development Factors Chart
Developed Losses and Developed & Inflated Losses Line Chart
Paid Loss Development:
Shows detailed analysis with individual year-to-year Paid Loss Development Factors, Average Yearly Paid Development Factors, Cumulative Paid Development Factors, Cumulative Proportions of Losses Paid, Cumulative Percentages of Losses Paid, Annual Percentages Paid (Payout Matrix), Standard Deviations and Coefficients of Variation (volatility), Summary Analysis of Cumulative Paid Development Factors, Cumulative Percentage Paid, Annual Proportion Paid and Annual Percentage Paid (Payout Matrix).
Cumulative Proportion of Losses Paid Chart
Cumulative Percentage of Losses Paid Chart
Loss Payout Matrix – Annual Percentage Paid Chart
Incurred Loss Development Analysis
Loss Development Factors
Cumulative Loss Development Factors
Loss Development FactorsWe produce extensive graphics, and include a full audit trail of underlying data.
Developed and Inflated Losses (Inflation adjusted)
We use proven methodology successfully applied in over 20 years of analysis.
Paid Loss Analysis
Paid Loss Analysis: We take historical loss data (even with gaps) and calculate Incurred Loss Development factors.
Paid Losses (Percentage Paid)
When provided annual reported paid loss data, we will provide Paid Loss Development factors, and Loss Payout matrix.