Loss runs validate your management skills and decision-making. Polestar Insurance has a solution that creates a “three dimensional object” from the loss run data which can help control the total cost of risk for your enterprise. The embedded video above is a testimonial from a franchisor. The insights from this “statistical analysis approach” can supplement the actuarial analysis which insurance underwriters may also receive when pricing your insurance program.
Mike Connell, on the video, used the analytical report to lower achieve several corporate benefits:
1) lowered insurance premiums substantially,
2) entered a quota share agreement with his carriers (which means profiting from better claims experiences),
and
3) increased the self-insured retention limits because the analysis enabled a better understanding of the claims patterns.
Surprisingly, using loss runs and this analytical tool can do much more than control insurance premiums.
CFOs may be able to analyze various divisions of an organization to determine best practices. For example, do certain brands in a hotel hospitality management company perform more safely than others? In restaurant QSR sectors, are some concepts more efficient than others? Does an operator of multifamily have one regional manager perform better than the peer group? We are able to use loss runs to help analyze which is how to improve an organization.
Below lists the information that can convert the loss run data into actionable data.
Exposure Data
Annual Historical Exposure Data corresponding to Loss Data years, and Estimated or Budgeted Exposure Data for the Current and Following Year (e.g., for WC: number of employees, payroll; for GL: $ sales or revenues; for Auto Liability: number of vehicles, number of miles; for Medical Insurance: census, # of members, by age group, by gender; for Property: Property Listings by Assessed Values, Replacement Values, Construction, Square Footage, HPR status, EQ protection level, BI risk Exposure [Historical & Projected Revenues & Net Income supported by properties, Primary & Secondary Use per property, Primary & Secondary Tenants]…)
Loss Data (Total Incurred Losses)
Minimum of 4 years of Claims – Loss Run Data (Showing at least Coverage* Occurrence Date, Incurred Loss Amount)
Successive Annual Valuations of Each Incurred Loss Year’s Claims**, Showing Occurrence Date, Incurred Loss Amount, Coverage (if more than one coverage). **Required for Loss Development
At Least 4-years of loss data with 15 or more claims per year (5 to 10 years of data preferred; works for up to 14 years)
* If more than one coverage.
**Loss Forecasting requires at least 4-years of data (max 14), with or without successive annual valuations. Successive Annual Valuations of Incurred Losses are required for Loss Development.