Not for profits & self insurance advice

Date21st March 2022

Case study

We worked closely with a not for profit organisation to provide self insurance advice for their commercial property portfolio.

The challenge

The business was considering alternative insurance arrangements for their commercial property risk. This need arose in response to reducing insurer capacity, with the organisation facing significant premium increases, higher deductibles and lower policy limits on renewal.

The solution

We developed a stochastic claims model to assess the value of the organisations current insurance arrangement and to estimate the total insurance spend under various insurance options. Our analysis was supplemented by location-based catastrophe modelling, using Finity’s inhouse propriety models finperils, to estimate the annual retained claims cost arising from natural perils losses such as cyclone, bushfire, storm and flood.

We worked closely with the CFO, COO and Insurance Manager over a two month period to understand the risk profile of the property portfolio and quantify the impact of various insurance options. The risk appetite and balance sheet strength of the organisation was considered in our final recommendations to the Board.

The business impact

Insights from the modelling informed strategic discussions with the insurer on renewal. The aim was to place an insurance programme that reduced the overall insurance spend while remaining within the organisation’s risk appetite. The location-based natural perils modelling also enabled the organisation to understand the relative risk of their various property assets to assist with internal premium allocation.

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