Common Concerns Analysis
Medical doctors extensively share information, so even if working for unrelated f irms they can consult on a diagnosis. Competition between insurers prevents this style of learning from other f irm’s experiences. Therefore, insurers with similar challenges are forced to f igure out optimal solutions on their own. As reinsurance brokers we have worked with hundreds of insurers and track issues and effective solutions. Client’s leverage this experience through our Common Concerns Analysis.
Case Study - Reinstatement Terms
5% chance of > 1 loss 0.5% chance of >2 losses
Solution: Performed an actuarial analysis measuring the probability of needing a 3 rd limit versus the additional reinsurance cost. Result: Client purchased 1 reinstatement and saved $750k in reinsurance costs. Issue: For this new client we identif ied a 2 nd reinstatement on a per risk layer that warranted further review.
80% chance of no loss
Deposit Premium
Reinstatement
Probability of No Recoveries Probability of 1 Limit Used Probability of 2 Limits Used 1 @ 100% 2,625,000 2 @ 100% 3,375,000 Difference 750,000
Answers Not Output Whenever we review our analysis with new clients we always f ind areas to improve. Typically we produce a list of items that would benef it from further investigation. Once we run our tailored analyses for your specif ic circumstances, we draw upon our past experience to help solve these items and design solutions best f it for your company.
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