Risk Transfer Analytics and Client Services

Towers Watson brokers are backed by a team of technical experts with a wealth of experience in a wide range of disciplines.

Our actuaries, mathematicians, attorneys, rating experts, accountants and other specialists have strong backgrounds in claims, contracts, accounting, catastrophe risk management and modeling, and software solutions. They work together to help our client service professionals provide the expertise that leading companies have come to expect from Towers Watson.

Also, the team works seamlessly with Towers Watson’s insurance consulting practice, the world's largest actuarial practice focused on insurance and the largest provider of actuarial software.

Risk Transfer Analytics and Advisory Services | Catastrophe Risk Management and Modeling | Contracts and Claims | Dynamic Reinsurance Management and Economic Capital | Market Research | Market Information | Rating Advisory | Technology

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Risk Transfer Analytics and Advisory Services

Reinsurance decisions are based on many factors, including management objectives, risk tolerance and the cost of reinsurance relative to other alternatives. To help our clients with decision making, we apply actuarially based pricing techniques and our brokers’ knowledge of the reinsurance market.

We’ll review your expected reinsurance cost and reinsurer assumptions, including the impact of any recent loss activity or change of business, before going to market. We’ll then use a blend of methods — ranging from the relatively straightforward and intuitive to the more sophisticated and complex — to analyze the risk/reward trade-offs of various reinsurance structures.

The outcome will be a transparent decision-making framework that will help you select an appropriately priced reinsurance structure to meet your needs. Once you’ve selected a structure, we’ll work to ensure that the actuarial information reinsurers evaluate is appropriately presented to optimize execution in the marketplace.

Beyond pricing and structural analysis, our actuarial services group offers a range of other services. We’ll act as your advocate in negotiations with reinsurers, A.M. Best Capital Adequacy Ratio (BCAR) analysis and cash-flow testing for risk transfer support. And we’ll tailor our flexible solutions to meet your specific needs.

Catastrophe Risk Management and Modeling

By improving data quality and providing the best models and tools for analyzing catastrophe risk, Towers Watson helps clients make solid risk management decisions.

Our highly experienced mathematicians, actuaries and database management experts ensure our clients get the customized information they need. In addition to licensing vendor models, we’ll show you multiple views of your organization’s catastrophe exposure and its potential impact on your balance sheet. We’ll also provide sophisticated analyses of the potential, incremental risk/reward associated with additional catastrophe exposure.

Towers Watson offers CATography™, our advanced suite of mapping tools. CATography’s robust mapping function has unmatched flexibility. Advanced mapping typically involves a steep learning curve, but CATography delivers sophisticated metrics without the need for significant training, which means you can start working right away. Our product suite includes applications for three key catastrophe management functions: risk management, underwriting and claims.

CATography, combined with our catastrophe modeling expertise, will enable you to design and implement a catastrophe risk management strategy tailored for your organization. Drawing upon our extensive experience in catastrophe management, we’ll work with you throughout the process — from data collection and assessment through implementation and monitoring.

Contracts and Claims

Marketing reinsurance successfully depends on precisely drawn contracts with “full contract certainty,” including terms designed to strengthen the claim collection process. We define contract certainty as follows: The fully fleshed-out contract is ready for execution by the effective date of coverage, and it contains all terms essential to coverage and claim recovery. Our policy is that all business must be contract-certain, subject to particular client-requested exceptions.

This standard aligns with our interdisciplinary approach to contracts and claims. Our experienced professionals, most with degrees in law or business, manage a continuous interchange that permits us to achieve a high level of contract precision, as well as timely, accurate claim processing and collection.

In addition to accepted claim processing follow-up procedures, a senior member of our team (a licensed attorney) tracks and aggressively pursues overdue reinsurance recoverables of significant size.

Members of our contracts unit, led by a professional with broad reinsurance experience, meet regularly with representatives of our reinsurance markets. This helps to minimize friction and fosters agreement around the acceptability of proposed wording. We develop precise reinsurance agreements in the areas of:

• Special termination
• Reserves
• Loss occurrence
• Arbitration
• Access to records
• Late payments

In addition, we maintain and regularly update a robust library of contract language.

Dynamic Reinsurance Management and Economic Capital

Our Dynamic Reinsurance Management (DRM) models enable us to estimate an organization’s underwriting and/or operating results, as well as other key financial metrics, under an array of probable scenarios. We initially model on a gross basis prior to reinsurance, and then under various alternative reinsurance structures, to identify the alternatives that best align with our client's objectives and risk tolerance level.

A DRM study can provide your organization with:

• A disciplined, objective platform that will allow your company's reinsurance decision makers to effectively evaluate cost/benefit trade-offs
• A better understanding of your risk exposure and the best ways to manage risk using reinsurance
• A more efficient reinsurance structure

As part of the DRM process, we frequently help clients integrate the analysis with a calculation of economic capital (EC), and we analyze the effect reinsurance has on such calculation. EC is a measure of the financial impact of a company’s risk exposure as it unfolds over time in multiple scenarios, and it takes into account the diversifying effect of various factors. We use sophisticated tools, including our Igloo capital modeling software, for this assessment. Often, we perform this work in conjunction with capital modeling assignments undertaken by our Risk Consulting and Software line of business.

Market Research

In addition to providing brokers and reinsurance clients with insightful analyses based on our extensive market research, we track market trends closely to spot emerging opportunities. We’ll help you capitalize on various growth strategies, including organic growth, expansion into new territories or new lines of business and taking advantage of market dislocations. Our strategic analyses deliver valuable financial insights at the company, market segment and industry levels.

Market Information

Towers Watson’s centralized market information team monitors the financial stability and credit ratings of all markets worldwide with which Towers Watson maintains trading relationships. Year-round, the team alerts our clients of significant changes in the financial condition of their markets to help them make decisions to bind business.  

Our market information professionals have credit, financial and analytical knowledge and skills. And the senior executives of Tower Watson’s worldwide reinsurance group review relevant market information, assess markets’ financial stability, and ensure markets meet minimum financial and rating criteria.

Rating Advisory

Towers Watson is a recognized leader in providing rating agency advisory services to insurance clients. Our team has extensive experience in financial strength rating evaluation, as well as long-standing relationships with managers and analysts at A.M. Best and Standard & Poor's. Our Rating Advisory Team leaders have worked for major rating agencies.

We advise clients on financial, operational and strategic issues that influence a company's risk management approach, its reinsurance program design, and its A.M. Best and Standard & Poor’s financial strength ratings. Acting as a trusted advisor, we assess our clients’ financials, capital adequacy and ERM practices relative to rating agency requirements.

We provide insights on rating agency hot buttons and what-if scenarios, and evaluate the effectiveness of reinsurance and other financing options relative to a client's risk appetite, financial goals and rating agency constraints. We also prepare companies for rating agency reviews with a goal of optimizing ratings.

Technology

Our client portal is a secure website where our clients can access up-to-date information on reinsurers, reinsurance claims, documents and contracts, around the clock, every day of the year. The portal provides current information on events affecting your business and gives you access to Towers Watson’s proprietary intellectual capital.