An experienced team of actuaries stands behind Collins' brokers, whether the client's business focus is in the property, casualty, life and accident & health fields.
Before undertaking any analysis, our actuaries evaluate the client's rate change histories, premium and loss histories, and any changes that may have occurred in the characteristics of a client's business. With the results of these analyses and additional information, Collins communicates with potential reinsurers about the extent to which the client's past financial results may or may not be indicative of future financial results.
Collins actuaries also help clients in determining the right retention level for a reinsurance program. Rather than analyzing the current reinsurance structure and assuming that it continues to meet the needs of the client, Collins actuaries routinely complete a more detailed retention analysis. In so doing, Collins actuaries will advise on the expected impact to operating results, reinsurance costs, and capital requirements as a result of any change in the retention.
After the desired reinsurance structure or structures have been determined - but before reinsurance negotiations - Collins actuaries provide the client with estimates of expected reinsurance pricing that are supported by thorough technical analyses. They estimate the probability of loss at different thresholds within a reinsurance program, and assist clients in determining how much risk to cede and how much to retain.
Supporting Collins' specialties
Collins Actuarial services are helping it to build industry-leading specialties. Our actuarial team, for example, works closely with the brokers in our professional liability unit, helping to make Collins the leading reinsurance intermediary in the nation for medical liability insurers. It also is applying its expertise with clients who write errors' and omissions' and other liability coverages for attorneys, architects, accountants and other professionals.
Actuarial services are also central to Collins' expanding national practice in reinsurance for workers' compensation writers. In workers' compensation, our actuaries do not rely solely upon the results of any one analysis in providing estimates of future reinsurance pricing. Instead, they consider the significance of both the actual historical experience and the theoretical exposure implied by industry excess loss factors. In addition, Collins' actuaries utilize the latest technologies and the most current industry data in examining workers' compensation portfolios. These include in-house stochastic simulation tools, Insurance Services Office (ISO) reinsurance pricing tools and information from the National Council on Compensation Insurance (NCCI).
Ongoing client services
Once the reinsurance program is in place, Collins' actuaries continue to support clients who are in need of financial and A.M. Best consulting services. Our actuaries and other financial experts meet with each client's management team to evaluate their current A.M. Best ratings. They review the client's Best's Capital Adequacy Ratio (BCAR) and (QAR), share trends developing at A.M. Best and provide supporting data, if needed, for improvement in a company's current rating.
To that end, our actuarial staff has developed a propriety model that illustrates potential impacts to a company's BCAR score given contemplated changes in reinsurance. We believe all insurance companies should be aware of the potential impacts to a company's BCAR score when deciding what type of reinsurance program to implement.
Other client services provided by our actuarial team include:
- FAS 113 risk transfer testing,
- Internal reinsurance cost allocation analysis,
- Capital allocation analysis, and
- Reserve analysis reviews.
Please contact Mike Larson for more information on Collins' actuarial services.