The Power of Data: How Complex Risk Analysis Can Help Your Business

Organizations must look for many risks to their operations in today’s global economy, including injuries, cybersecurity threats, and other hazards unique to their processes. Risk is, by definition, uncertain, and the end costs of many incidents and losses remain unknown. However, insurance is designed to protect businesses from these events, and countless plan designs and financing mechanisms are available that may have different impacts on the company’s outcomes and bottom line. The power of complex risk analysis is to understand these impacts.

Using loss history, historical exposure information, market data, benchmarks, complex risk analysis, and financial management can prepare businesses for harmful events and reduce surprises related to their insurance costs. The experts at Henderson Brothers have managed and mitigated risk for nearly 130 years. We are strategic risk advisors in data analytics, risk mitigation, and claims management. Our departments work cohesively to help you understand and navigate the complexities of risk for your business.

Reducing Your Total Cost of Risk

Our end goal is to reduce the total cost of risk (TCOR) for our clients in the way that makes the most sense for their organization’s priorities. TCOR typically includes insurance premiums, retained losses, and internal administrative costs related to managing risk.

There are numerous ways to manage these costs, including different programs such as guaranteed cost, loss sensitive, and captive insurance. Businesses may also want to tackle a particular aspect of their insurance costs related to claims management, such as implementing and vetting managed care programs for workers’ compensation policies. Our complex risk department examines various options and scenarios for policy design and selection, and the claims process after an incident. We show businesses their options and how their costs will be affected over time.

When you work with Henderson Brothers to understand your complex risk, you also receive the added benefits of our in-house risk control and claims departments operating under the same roof. Our team uses data analytics to review your insurance program. Then, we collaborate internally to craft a solution tailored to your needs and business. We provide tools for visualizing and interpreting risk and cost data, strategies for mitigating risk, and claims management services, all designed to improve outcomes and lower insurance costs.

Explaining Your Options

Our complex risk department investigates and discusses loss performance for companies with existing loss sensitive programs, offers predictions about the renewal rate and structure, and demonstrates what associated collateral will be needed. We also explore the ramifications of changing the type of program. For example, if you currently have a guaranteed cost policy and your premium is increasing, you may consider a loss-sensitive option with a deductible. We will build and analyze the cost implications of that program, so you are prepared for what the TCOR will be.

Loss sensitive programs typically apply to general liability, automotive liability, and workers’ compensation lines and are best suited for companies with higher risk tolerance. Unlike guaranteed cost programs, the end cost of loss sensitive policies changes depending on the actual losses incurred. Our complex risk department models and explains all aspects of these plans, including how claims reserves work, the cash flow benefits of paying premiums and losses over time, and deductible options, to name a few. In some cases, it may make sense to raise the deductible to capitalize on lower premium costs.

We provide alternative risk financing options for companies that would benefit from leaving the traditional insurance market. For example, captive insurance programs have become more common as they allow businesses to escape the volatile insurance market. We use our risk analysis capabilities to find the model and captive type that matches your needs and assist in creating custom loss control and claims programs that would go along with it.

Delivering Data You Can Use

We help you apply your loss and claims data to manage your company’s risks by employing powerful software and data visualization to create customized tools for each client. Using the Microsoft Power BI platform, we design interactive dashboards and reports that put your data in an easy-to-understand graphic format.

Our reports incorporate your company’s past performance and records. Henderson Brothers leverages our vast experience in insurance and financial services to construct targeted benchmarks for you from our portfolio instead of relying on carriers or third-party vendors. Our own portfolio allows us to track performance against peer companies we have worked with directly in the past and gives our clients a more relevant data standard.

Your business goals drive everything we do. Our complex risk department empowers our customers to find insurance solutions that protect their businesses and employees while striving to lower their TCOR. Our advanced data analytics and a synergistic team of analysts, risk control experts, and claims managers are here to support you in understanding and predicting your company’s risks so you can feel confident and prepared in your decision-making.

Introducing Mark Hairston 

Mark Hairston is the Senior Financial Consultant in Commercial Lines. He heads up the Complex Risk Department. Mark joined Henderson Brothers in 2020 after 15 years of underwriting national and global loss-sensitive programs. His experience with large and complex accounts brings a valuable financial perspective to risk analysis. He is instrumental in developing our model programs, collateral analysis, and data analytics operations and leading our new complex risk department.

The Complex Risk Department brings together our loss-sensitive, captive, cyber liability, directors and officers (D&O), and data analytics teams to help our clients understand and manage their risk.

“Coming from large insurance companies, it’s so nice that the whole Henderson Brothers team is right here, and we work together on a daily basis. Complex risk analysis ties into our risk control capabilities, our claims capabilities, and our overall high level of service we want to provide for our clients. Every product we deliver involves internal collaboration, so we get a better end result for our clients.

Often, we will have a consultant come to us with a question they have received from a client. We will then sit down as a team to discuss what we can build for the client and how to answer their question, instead offering an off-the-shelf blueprint that may not be the best fit for them.”

Mark Hairston

Please note that the information contained in this posting is designed to provide general awareness in regard to the subject matter covered. It is not provided as legal, medical, or tax advice, nor is it intended to address all concerns in your workplace or for public health. No representation is made as to the sufficiency for your specific company’s needs. This post should be reviewed by your legal counsel or tax consultant before use.