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How All Clients – Small or Large – can Benefit from Analytics

risk66_ad_new2video_adSIGMA recently celebrated six months of success with our new online product, RISK66.com, which contains training videos, resources, and the online version of Loss Forecaster. This process has prompted a lot of conversation about what types of analytics best serve clients of different sizes. As result, we are developing LORAN, a new analytic tool for RISK66 that will assist brokers with small clients and ensure that, no matter what the client’s size, SIGMA has a useful analytic tool. We will keep you updated on this product as it approaches release in 2018, but in the meantime, this blog post will provide information on the types of analyses typically attributed with the various client sizes, as well as touching on the basics of LORAN.

Once LORAN is complete, SIGMA’s various analytic capabilities will correlate to client size in the following way (using Workers Compensation as an example):

LORAN

  • Small clients on guaranteed cost policies
  • LORAN will be used to quickly analyze a loss run with the click of a button. While it provides less depth than the other options, this analysis should answer key questions for clients with few or inconsistent losses.

LOSS FORECASTER

  • Large clients with (or considering) a loss sensitive program
  • In this situation, clients should receive an analysis of their historical loss data using Loss Forecaster. There are a variety of questions that can be addressed with this tool, which will be covered in a future blog post.
  • For those of you not familiar with Loss Forecaster, it is available at www.RISK66.com

SIGMA ACTUARIAL CONSULTING GROUP, INC.

  • Large clients with a mature loss history and/or complex policy
  • As your client grows and utilizes a loss sensitive program, you will want to engage the services of SIGMA’s consulting group. The provided actuarial analysis and consultative process will support your effort to deliver the best decision-enhancing analytics possible, as well as the data needed to evaluate historical performance, project losses, and negotiate with underwriters. Knowing when and how to engage SIGMA’s services will be covered in June’s blog post.

The remainder of today’s blog will focus on the process of dealing with smaller clients, which we plan to automate into LORAN. As mentioned above, LORAN will complete SIGMA’s three-tiered analytic service offering, thus providing you with an analytic solution for clients of all sizes.

LORAN

Nearly every small client with a guaranteed cost policy wants a better idea of whether or not their insurance expenses are appropriate when compared to other, similar companies. Many of these clients would also like to better understand how to lower their insurance expenses (premium) and protect their employees through loss control programs, but don’t know where to start.

Knowing this, the purpose of LORAN is to provide an analytics tool that allows a small company to better utilize their insurance data and helps them develop potential solutions to common issues. When used appropriately, these companies will better understand the value they are getting for their premium dollar and gain insight into ways to potentially lower their premium expenses and reduce employee injuries.

In the process of designing LORAN, we approached the desired result by identifying some common questions a company may have regarding its workers compensation risk management program and then determining analytics that can help lead to potential answers. LORAN is currently in the process of development, but these questions can still be useful on their own when used with a small-sized client.

Question 1:
As a guaranteed cost insurance buyer, how much is my insurance provider making off my company, and is it reasonable when compared to other insurance providers?

Question 2:
What actions can a company take to lower their premium or reduce the losses driving that premium?

Question 3:
Is my insurance company properly handling my claims?

Question 4:
How are my claims trending?

As you can see, these are simple and straightforward questions, but the topics and discussions they lead into can be extremely beneficial. The analysis LORAN generates to answer these questions is more complex, but it will be automated for your speed and convenience. Our vision is for you to import a loss run, press a button, and instantly generate a detailed report that addresses these simple questions with robust analysis.

Stay tuned for a sample of LORAN analysis and output later this year. This new analytic tool will be made available at no additional cost to all RISK66 subscribers.

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Timothy L. Coomer, Ph.D.

About Timothy L. Coomer, Ph.D.

Dr. Coomer has a Bachelor of Engineering Degree with a double major in Mechanical Engineering and Mathematics from Vanderbilt University. He holds a Masters in Business Administration with a concentration in Finance from the Owen Graduate School of Management at Vanderbilt University and received his PhD from the Spears School of Business at Oklahoma State University. He founded Specific Software Solutions, LLC (1990) and developed the ModMaster Suite of software products. Dr. Coomer also co-founded SIGMA Actuarial Consulting Group, Inc. (1995). He presently serves as Chief Executive Officer of SIGMA and retired from Specific Software Solutions, LLC in 2010 after selling the business to Zywave, Inc. Dr. Coomer is now focusing on leading SIGMA’s RISK66.com effort along with traveling to meet brokers and clients around the country.

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SIGMA Actuarial Consulting Group, Inc.
5301 Virginia Way, Ste 230
Brentwood, Tennessee 37027
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