Product Update

Risk Quantification Factors Updated in Risk Financing


This release of Risk Financing revises the risk quantification factors in Appendix F including the workers compensation loss development factors (LDFs) and benefit level adjustments, general liability and automobile liability LDFs, payout profiles, and the consumer price index. Note that updates to the US claims cost indexes were not available at the time of the release. We will provide those as soon as they are completed. In the meantime, subscribers should feel comfortable utilizing the factors currently listed. The annual changes are typically not significant.

Several applications of the trend factors and payout profiles are described in the discussions in the "Risk Quantification" section. "Risk Quantification Data Requirements" discusses information required for different types of analyses and where insureds typically can find it. This section also provides examples of how trend factors are utilized, such as those for loss development, benefit level adjustments, and inflation indexes. It explains the use of payout profiles and present value analysis for different risks. "Basic Loss Forecasting Methods" offers additional examples for forecasting losses.

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