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DECISION SUPPORT ANALTYICS

Analytics are a core tenet of all HCAB's services they are used to help clients make informed risk decisions through use of stochastic tools to provide quantification and optimization decision support. This approach has enables the following for clients:

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  1. Allow increasingly sophisticated buyers to decrease their reliance on speculation, external benchmarking and rule-of-thumb assessments in making risk financing decisions

  2. Enhance risk appetite and tolerance evaluations by identifying what should be retained and not what could be retained

  3. Determine the technically optimal program structure, i.e., the combination of limit, retention and premium that most efficiently balances risk retention and risk transfer

  4. Objectively measure the value derived from different risk financing structures (by layer and in total)

  5. Places insurance purchasing into the same capital efficiency framework as any other investment decisions required by stakeholders

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Heading 1

Risk Quantification

Risk Optimization

Cost of Volatility

The cost of retaining the volatility is a translation into a dollar value of the uncertainty around expected losses.    The opportunity cost on this risk capital, calculated by applying a capital charge to it, is the cost of volatility.

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