Refine your risk finance strategy and reduce risk without increasing your insurance spend, or reduce insurance spend without increasing retained risk by taking your risk finance optimization strategy to the next level with Connected Risk Intelligence.
This is portfolio visualization you can act on.
Connected Risk Intelligence pushes your total cost of risk to work harder by giving you recommendations on the most efficient combinations of limits and deductibles. The platform makes recommendations both for individual risk lines and across your total insurance portfolio, plus the market intelligence to help secure the most efficient structures.
Do you really need all the coverage you’re paying for?
Would alternative limits and deductibles for different lines be more efficient and effective in protecting the business? If so, are these achievable in the markets?
Are you considering the impact of correlated risks in your strategy and can you leverage non-correlated risks to take advantage of insurance arbitrage?
Connected Risk Intelligence gives you the answers plus the practical steps toward more efficient risk and insurance optimization and a lower total cost of risk.
Cut costs without increasing risk with Connected Risk Intelligence
Connected Risk Intelligence combines portfolio visualization that reveals the ‘efficient frontier’ of your risk and insurance program with specialist risk modeling and brokerage expertise. It offers:
Individual risk modeling showing the results of thousands of simulated loss scenarios and the most efficient limits and deductibles for each of your risks individually
A portfolio view of risk and insurance optimization to enable insurance arbitrage, making risk diversification deliver for financial performance
Broker support to check your optimized risk and insurance portfolio is practically possible, bridging the gap between the theory of your most efficient insurance program and the realities of securing capacity on the terms you need
A way to connect insurance purchasing and risk tolerance with overall financial performance, equipping risk, finance and other professionals with the analytical insight linking risk and insurance optimization to achieving your organization’s strategic objectives.
Risk and insurance optimization: How Connected Risk Intelligence works
There’s no single answer on where the most efficient trade-offs between cost and risk reduction lie. The specifics of your business and your risk and insurance optimization priorities will shape your experience with Connected Risk Intelligence.
Below, we look at some of the key elements that shape how we typically deliver reduced total cost of risk with Connected Risk Intelligence.
Our portfolio optimization approach entails five critical components:
Establish risk tolerance
To optimize your tradeoff between cost and risk, you must know the level of risk protection the business needs . We work with you to create a risk tolerance framework that lets you take calculated risks with confidence by demonstrating the rationale for your risk and insurance optimization decisions down the line.
We collaborate to define your financial priorities, using the key performance metrics that matter to you.
We identify your key risks and build models to quantify and forecast the losses you could experience that could threaten your strategic priorities, considering insurable and non-insurable risks, depending on what you need.
Our analysis puts numbers around what could happen, how likely it is to happen and how bad it could be financially. We define the likely total cost of losses in a typical year, an average year and in an adverse year scenario, from the moderately bad to the catastrophic.
After we build a quantitative framework of the potential losses for each material risk, we then think about correlations and diversification.
If you have a bad year in your liability risk, are you also going to have a bad year in property, cyber or something else? Or maybe not?
We help you recognize those risks likely to manifest simultaneously and risks where the likelihood of them happening collectively or coincidentally, is low.
We typically call on historical claims, exposure details and industry data to build frequency and severity models, but can also customize our modeling approach based on the type of risk you want us to look at, what data is available and what you need from the analysis.
You choose the level of inputs and level of detail you require. If a broader-brush view is enough, we can work with that. If you want to supply detailed datasets, we’ll run our models to generate a more granular and bespoke view.
We identify feasible options that consider your business imperatives and preferences, as well as the insights from our risk quantification analysis.
We work with our brokers to test individual policy options, giving you an indication of what’s achievable in current insurance markets.
For each structure option, we let you know how much loss you’d be expecting to retain and how much you’d be transferring; how much loss you would retain and transfer in an adverse year, and how does the premium spend align or not with the transfer of forecasted losses.
We can also test alternative risk transfer structures, or integrated placements where you buy an aggregate across multiple lines of coverage. Connected Risk Intelligence links you to our global network of brokers and risk management specialists dedicated to making your optimized risk and insurance program happen.
What do you need, what can you get, and what alternative could push your risk spend further? Our team works with you to turn risk optimization theory into financial value-generating practice.
By evaluating options from across different risk markets within a common framework, you can arbitrage markets that aren’t otherwise in competition with one another, for example, property insurers and D&O carriers.
Connected Risk Intelligence goes beyond looking at your risk in isolated silos. It combines powerful data analysis for a portfolio view of risk. You can visualize your risks in a single framework that clearly sets out where you can cut costs without increasing risk.
We map your options in terms of cost and risk to form a ‘cloud’ of potential risk financing strategies (see graphic).
Each strategy or ‘dot’ on the cloud represents a unique combination of feasible risk financing options.
We highlight the most efficient strategies on an ‘efficient frontier,’ representing those combinations that most efficiently trade off the cost of insurance and the cost of retaining risk for your organization.
How well does a policy protect you against specific loss outcomes? What happens to cost and risk with different combinations of, for example, high limits in one risk area and lower limits in another? Connected Risk Intelligence lets you test and learn to reveal what the most efficient combinations look like for your business.
The output of this approach is a detailed path of the steps you need to deliver the most effective and efficient risk financing program available.
We’ll help you identify and implement the portfolio option that’s right for you. You can be more confident your risk strategy is right for your business; your risk exposure is at the correct level and that you’re paying only what you should to protect the business, and no more.
