The following shows an extract from the typical results of an Initial Healthcheck applied to a client with a very inefficient insurance programme:

 

Initial Healthcheck: Typical Report Findings and Implications

The following shows an extract from the typical results of an Initial Healthcheck applied to a client with a very inefficient insurance programme:

I. Your Past

Detailed Findings

01. Reserves Last actuarial review 5 years ago, never finalised

No up to date assessment of adequacy of reserves for historic risks

02. Data Inventory No documentation of reliability of data used to determine balance sheet reserves eg asbestos publicity/HSE forecasts
03. Core Risk Metrics

No understanding of large claim frequency by class

No understanding of substantial insurer profit margin (insurer’s loss ratio was 20%)

04. Legacy Policies

Piecemeal inventory of historic policies/insurers (assets)

No understanding of their current name, solvency condition/likelihood of future claims (asset value)

Implications (1) Impossible to assess whether historic risks are over-reserved (unnecessarily ties up funds for past risks which could be used for future risks)
(2) Usually means low XS/AGGS (potential characteristics of future claims assumed to be worse than they really are)
(3) Low XS/AGGS are usually unattractive to insurers (you are retaining a minimal share of a potential future large catastrophe claim)
Financial Impacts (1) XS/AGGS too low/premiums too high for the real extent of future risk
(2) Excessive insurer profit

“Ask John to perform his version of search and destroy on your premiums”

“Ask John to perform his version of search and destroy on your premiums”