Magazine article Risk Management

Solid Risk Analysis Tools Take on Greater Importance as Catastrophe Losses Drive Rate Increases

Magazine article Risk Management

Solid Risk Analysis Tools Take on Greater Importance as Catastrophe Losses Drive Rate Increases

Article excerpt

However, some lines of business and affected regions will experience reduced capacity, higher prices and scaled-back underwriting appetites as insurers and reinsurers take stock of their positions.

It is at times like these when the value of solid risk information and analysis becomes clear. Information is the fuel that drives the results of successful risk management programs. Well-packaged risk and claims reports and analysis can help a risk manager track claim frequencies and trends, as well as pinpoint operations and processes that may be driving losses upward. Customers that understand their risk information and loss trends are able to exercise greater control over the cost of loss. This can result in greater stability in insurance costs over time and improved bargaining power with the providers of risk management products and services.

However, to be useful, risk information needs to be presented to the customer in formats conducive to easy understanding and interpretation. In the past, insurance customers have often complained that loss data provided by insurance carriers was unstructured and not particularly useful for implementing positive changes in risk management programs. The good news is that insurance carriers are heeding the calls of large corporate customers for data analysis tools and reports that can empower them to achieve positive impacts on claim trends and cost of risk.

Risk managers should look for and request a variety of factors in the packaging and delivery of relevant risk information and analysis. Increasingly, insurers are offering one of the most functional ways to access this information--Web-based systems offering 24/7 availability. Access should include the ability to choose from a wide range of views, so that risk managers, CFOs and others are able to choose the level of detail they need.

Ideally, risk information systems should provide single sign-on access, eliminating the need for multiple passwords to view various fields and functions. Loss reports should be updated daily and be able to be viewed online, printed, sent by e-mail or downloaded into spreadsheets.

Adjusters' notes should also be viewable online, subject to any applicable privacy restrictions. Finally, customers should have the ability to speak directly with an analyst and to request customized reports to better address specific needs. …

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