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RESEARCH AND BRIEFINGS

Take the Guesswork Out of Risk Management

As risk events unfold at varying speeds and complexities, organizations can get blindsided by prior experience, confirmation bias, or simply by not seeing risks. The ability of businesses to expect the unexpected, accurately assess their potential impacts, and implement effective mitigation measures has never been more key to achieving resilience.

Some risk managers may think that benchmarking suffices when making important insurance program design decisions. However, benchmarking has its shortcomings, especially since every business has different levels of risk exposures and tolerance as informed by their business strategies. 

Furthermore, with rising insurance costs and complexity, business stakeholders and senior management are applying greater scrutiny to the performance of their insurance programs and risk managers are challenged to provide quantifiable support for their insurance and risk decision making. 

Why Risk Finance Optimization?

A robust approach to optimizing your risk management strategy is to perform a Risk Finance Optimization (RFO), a tailored data-driven exercise to identify the most economically efficient means to finance your risks.

With emerging, complex and rapidly evolving challenges, you need more than historical views to manage risk, allocate capital and achieve results.

RFO gives you this edge by assessing these questions and more:

  •  Will a higher deductible breach our risk tolerance level?
  •  Are my policy limits sufficient? How volatile could my losses get?
  • Are the quoted premiums value for money?

Expected Benefits and Outcomes

  • Potential for cost savings to your Economic Cost of Risk. 
  • Deeper understanding of your risk profile and risk financing trade-offs.
  • Measurement of the economic value that insurance delivers.
  • Explore alternate risk retention and transfer options, e.g. deductibles, limits, captive solutions.

Why Marsh Advisory?

Marsh Advisory’s Analytics Solutions team has deep experience with the RFO process. In Asia, this is provided by 12 actuaries and analysts with deep financial modelling experience across more than 20 industries, benefiting 170 organizations since 2019.