In 2023, SIGMA conducted a collateral survey to assess, on a national basis, trends in collateral negotiations, exposures, reviews, arbitration, and many other factors. Since 2009, SIGMA has conducted this survey eight times which has allowed us to better understand both short-term and long-term trends. Collateral is especially important during times of financial uncertainty, such as the 2008 financial crisis, the COVID-19 pandemic and the 2023 banking crisis. Our most recent survey revealed several compelling insights. For example,

• 75% of respondents had carriers complete a scheduled collateral review in 2023. This is the highest percentage since the first survey in 2009.
• The percentage of respondents who used actuarial consultation or analysis to support collateral strategies is consistent with the results seen in prior surveys. Based on nearly 800 responses from all survey iterations, approximately 67% of respondents used actuarial consultation.
• Approximately 12% of respondents indicated that their carrier had requested collateral be shifted to a different banking institution as a result of the early 2023 banking crisis.
• There was a significant increase in the number of respondents who have posted collateral for more than eight years. This category represented approximately 88% of the respondents for the 2023 survey.

We highly recommend reading SIGMA’s 2023 report for full results of the survey, including commentary for each question. You will also find recommendations for improving your entity’s collateral strategy and a resource list for further reading.

View the full report at RISK66.com. Simply login, and select “Resource Library” from the left-side menu. The 2023 Survey Results are located in the top row. If you do not have a RISK66 account, you can sign up for a free educational license. This complimentary subscription gives you access to our complete collection of educational PDFs and training videos.

We welcome discussion with any of our insurance colleagues who want a better understanding of these topics, and those wishing to contact us can do so at support@SIGMAactuary.com or by scheduling a call today with one of our consulting actuaries.

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