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Most organizations are evaluated on a risk-adjusted return basis and earnings potential. The volatility around such drive the value of a business. Given the current economic climate, validated and informed risk management and business decisions are required. Quantitative support and innovative solutions can help measure and estimate potential impacts; enhance deliberations of key business, financial, and insurance issues; and reduce the uncertainty attached to strategic growth, budgeting, change, and macroeconomic volatility.
What Will You Say When They Ask What Happened?
An accurate quantification and assessment of risk is paramount to an organization's success as a viable entity. Executives who want to ensure that their organizations are undertaking an efficient and effective process of quantifying risk should begin by asking the following questions:
- What is the basis upon which our key risk management decisions are made?
- Do I understand the full range of financial outcomes?
- Are we able to implement substantiated, sound, risk analyses?
- Do I know how much risk and/or volatility my organization can sustain?
- Does our organization have the right tools to navigate the cyclical risk-transfer marketplace?
- Do our third party risk consultants and actuaries understand our risk and communicate their findings in a useful way?
- Is our organization confident that we've posted liabilities that match the risks our organization faces?
- Am I cost effectively reducing my volatility of cash flows?
Who's Looking Out for You?
The Modeling, Analysis & Design team at MRC can assist you with all of your risk quantification and actuarial service needs. Given MRC's extensive industry experience and breadth of risk evaluation expertise combined with the actuarial resources of Oliver Wyman, no other broker or actuarial consulting firm can match the service offerings provided. MAD can assist you with your core actuarial needs, loss forecasts, historical ultimate evaluations, as well as advanced simulation modeling, decision analysis, and risk finance optimization.
The focus of all analyses is to deliver value to clients by quantifying the full range of possible outcomes in an unbiased and actuarially sound manner so the best risk management business decisions can be made. This often results in innovative solutions which help clients mitigate and optimize their risk portfolios.
Actuarial Services
Extensive actuarial resources are available. Between MRC and Oliver Wyman Actuarial Consulting, we have over 35 certified actuaries and 120 actuarial professionals. Our focus is on a client-specific analysis, where the assumptions and methodologies are tailored to the client. Service offerings include prospective loss forecasts for budgeting and negotiating the insurance transaction, historical ultimate loss evaluations for accruals and collateral needs, actuarial analysis for Enterprise Risk Management (ERM), and cash flow studies all geared toward the analytical delivery of "value-add" decision support tools required in today's risk management environment.
Risk Finance and Insurance Program Optimization
Actuarial and financial analyses can be combined so business leaders can make substantiated decisions about their individual risk transfer programs as well as their entire insurance risk portfolio. Risk Finance Optimization explicitly integrates a corporate risk analysis of operational and hazard risk so a higher return for the capital allocated to risk can be achieved. Insurance Program Optimization explicitly evaluates insurance programs by quantifying the reduced expected loss and corresponding volatility impacts on the organization. Substantiated decisions are then enabled considering limits purchase (amounts and cost) as well as various risk retention strategies.
Advanced Actuarial Modeling and Innovative Solutions
Decision modeling and scenario testing are effective ways for organizations to dynamically quantify their risk and then see the effects of various risk management strategies. Predictive modeling can be used to project an organization's exposure to certain hard to quantify hazards as well as estimate the impacts of various loss mitigation strategies. Innovative solutions tailored for a client's specific needs come in many formats, such as capital allocation and variable Total Cost of Risk (TCOR) analyses.
Advanced Modeling for Business Decisions
Advanced quantification measures are integrated into MRC's various consulting services as well. Through dynamic financial analysis, an actuarially sound quantitative approach is used in evaluating decisions in supply chain, business continuity, crisis management, capital project risk management, loss control, and more. Through scenario analysis, simulation and risk distribution modeling, the resultant risk scenario outputs can be reviewed and the value of various business strategies can be assessed. This supports the overall decision-making process and enables clients to demonstrate effective corporate governance.
If you have any questions or would like additional information, please contact us.
If you are seeking information about insurance and related services, please visit marsh.com.
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