We provide estimates for use in setting liability reserves. Reserve estimates are usually provided as undiscounted, expected values of unpaid, ultimate losses. Our reserve estimates are often provided as part of a statement of actuarial opinion and backed by a detailed, easy-to-read actuarial report. Typically our reserve estimates are accompanied by funding estimates. Our methods are equally useful for claims-made and occurrence coverage forms, and they apply to long-tailed and short-tailed lines.
We provide estimates suitable to guide the selection of funding amounts to provide for future loss payments. Funding estimates are usually provided as discounted percentiles. The percentiles provide the benefit of allowing management to make informed funding decisions based on their level of risk tolerance. Our simulation methods produce meaningful percentiles in ways that are not possible using traditional actuarial triangles. Typically our funding estimates are accompanied by reserve estimates. Our methods are equally useful for claims-made and occurrence coverage forms, and they apply to long-tailed and short-tailed lines.
We provide prospective coverage year forecasts of liability based on our underlying parameter estimates and forecasted exposure counts. Our forecasts are useful for management budgeting and planning purposes. Forecasts are often provided as part of a broader analysis of reserve and funding requirements. We are experienced with claims-made and occurrence coverage forms and both long-tailed and short-tailed lines.
We provide estimates of the potential impact of changes to risk management programs. When management considers changes to policy terms or covered risks, we can provide estimates of the financial impacts of those changes. For example, we can estimate the probability of regret for increasing a commercial policy deductible in exchange for a lower premium. We can also estimate the impact of adding physician coverage to a plan that currently covers only hospital or clinic risk.
Our reserve and funding estimates are often used in preparing accounting documents subject to audit. We work closely with auditors to provide data and answer questions in a thorough, timely fashion in order to meet tight accounting deadlines.
We provide support to risk managers and insurance brokers who are shopping for commercial liability coverages. Our estimates and opinions can provide insight into which commercial quotes provide the most value to the insured. We can evaluate various limits, excess coverages, deductibles, cluster claim provisions, and more.
We can provide much more than dollar estimates of liability. We can help identify the sources and trends of risk. For example, we identify how loss size or severity is changing over time, how the mix of indemnity and expense is shifting, and how the frequency of claims is trending. We are experienced in estimating the impact of tort law changes (tort reform) as well as other environmental shifts.