Large deductible policies provide companies the opportunity to reduce their insurance premiums in exchange for a portion of the retained losses from a covered risk. In some cases, the amount retained by an insured is based on costs from individual claims or occurrences, but it might also be based on the total cost of claims over a full policy period.
While this type of policy is a great way to optimize an entity’s risk financing strategy, it might not be clear which deductible level is most likely to be cost effective. The process of determining an optimal amount involves four key steps, which are outlined in one of RISK66’s most popular resources, the Large Deductible graphic.
To ensure we’re always providing useful, up-to-date information to our audience, SIGMA frequently reviews and updates the resources and videos in RISK66’s free educational library. Most recently, these efforts resulted in the enhanced version of the Large Deductible graphic shown above.
Achieving an optimal level of retained risk through proactive reviews can be one of the most effective ways of impacting an entity’s financial health. As such, we hope you’ll take the chance to download this resource and use the material within to drive decisions around your company or clients’ current policies. The potential savings offered through these sorts of discussions should never be overlooked.
If you’re interested in tools available to assist in this process, be on the lookout for next month’s blog, as it will mark the public release of yet another enhanced RISK66 resource: the Large Deductible Comparison Tool! Insurance and risk management professionals equipped with this information will have a significant competitive advantage when recommending the most optimal levels of retained risk.
As always, SIGMA is available to discuss solutions to challenges unique to a particular company or industry. Schedule a call today with one of our consulting actuaries.
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