You Should Know Your Own Loss Data Better Than Your Insurer Does
Your risk team has the opportunity to begin preparing months before renewal negotiations. If you start early enough and analyze your historical loss data deeply enough, your organization can develop a more complete understanding of its own risk than an insurer is likely to develop independently.
That can be especially valuable when your organization’s
actual loss experience is better than industry averages.
1. Benchmarking Can Work Against Better-Than-Average Organizations
Conventional actuarial and underwriting analyses often rely in part on benchmarking.
Benchmarking reflects the average experience of an industry for each line of coverage.
If your own loss experience is better (ie. lower) than that average, you may not be receiving full credit for how well your organization is actually performing.
That is why your own historical loss data may deserve a much deeper look.
RAS analyzes the client’s own historical loss data exclusively
and exhaustively — with no benchmarking.
2. A Deep Dive Can Reveal What Standard Analyses Miss
A true Deep Dive goes far beyond simply reviewing total losses. RAS uses its proprietary RiskMap® technology and methodology to examine multiple slices and sub-slices across different sets of years of historical loss data to identify:
- changes and patterns in loss frequency;
- changes and patterns in claim severity;
- unusually large losses that may distort the overall picture;
- differences between older and more recent accident years;
- favorable or unfavorable trends;
- patterns and relationships that may not be apparent through conventional analysis; and
- information that may provide a clearer perspective on expected collateral requirements for future reserves.
The goal is to understand what the data is really saying —
not merely what the totals appear to show.
3. Your Loss History May Tell a Very Different Story Than the Totals Suggest
Two organizations can have similar total losses while presenting very different risk profiles. One may have experienced several difficult years followed by substantial improvement. Another may appear favorable overall while more recent results indicate deterioration.
A Deep Dive can help the risk team and broker understand those distinctions and use them to the organization’s advantage.
Those distinctions can matter greatly when
insurers are evaluating and pricing the risk.
4. Deeper, More Exhaustive Analysis Gives Your Risk Team and Broker Stronger Facts to Bring to the Market
The objective is not to replace the broker, insurer, or actuary. It is to give the insured and its broker a deeper, evidence-based understanding of the organization’s own loss experience to:
- emphasize favorable trends;
- explain unusual historical losses in proper context;
- identify emerging concerns early;
- support their position with detailed analysis, documentation, and a full audit trail;
- present the risk more effectively to insurers; and
- in some cases, gain consideration from insurers that had not previously been willing to quote the risk.
Better findings can create better renewal outcomes.
When the insured and its broker understand the data in depth before
negotiations begin, they are in a much stronger position to explain
the risk rather than simply react to the insurer’s interpretation of it.
5. Any Time Is a Good Time to Dive Deeper — but Earlier Is Better
Ideally, begin the Deep Dive process months before renewal so there is enough time to complete the analysis, coordinate with the broker, and determine how the results should be presented.
When deeper analysis uncovers significant findings,
those findings can give insurers reasons
to offer more favorable terms at renewal.
6. A Deep Dive Analysis Supports Ongoing Risk Management
A Deep Dive Analysis gives the risk team a clearer understanding of its historical loss experience and provides well-documented findings that can support:
- proactive risk management;
- safety and loss-control initiatives;
- risk-mitigation efforts; and
- ongoing collateral reassessment.
The value of a Deep Dive is ongoing — it does not end at renewal.
Better loss analysis supports stronger risk management practices throughout the year.
7. The Free Preliminary Review Comes First
For prospects seriously considering having a Deep Dive Analysis, RAS will do a complimentary preliminary review of the organization’s historical loss data.
Using our proprietary RiskMap® technology and methodology, our preliminary review is designed to determine whether a Deep Dive is likely to produce meaningful additional insights.
If the results show that a Deep Dive is likely to provide meaningful value, RAS will prepare a proposed Scope of Work for review and discussion with the client.
Then the organization will have time to make an informed decision and obtain whatever internal approvals may be necessary before the Deep Dive begins.
If the preliminary findings do not indicate that a Deep Dive
is likely to provide meaningful value at renewal,
through a better understanding of historical losses,
or by supporting ongoing risk management —
RAS will not recommend moving forward.
Would a Deep Dive Help Your Organization?
If you are interested in finding out, schedule a brief 15-minute meeting with RAS.
CONTACT RAS