Management Consulting

Public sector organisations often grapple with the dual challenges of tighter budgets and rising insurance rates, which complicate their insurance purchasing decisions. Many of these organisations find that their current claims retention levels are based on historical practices rather than informed, strategic choices made during annual renewals. This misalignment can lead to inefficiencies, where organisations miss out on potential savings by not adjusting their claims retention structures to better reflect their current risk profiles. To address these issues, Aon developed the Claims Retention Insight Platform (CRIsP), a dynamic analysis tool designed to help public sector organisations optimize their insurance programme structures. CRIsP allows for a detailed comparison of various claims retention options under realistic scenarios, utilizing a Total Cost of Risk (TCoR) measure. This tailored analysis is scalable and can incorporate multiple lines of business, provided there is sufficient claims data available. By estimating claims volatility associated with different retention levels, CRIsP enables organisations to make informed decisions that balance cost savings with the risk of claims volatility. The CRIsP process involves a comprehensive analysis of historical claims performance, which culminates in a detailed report outlining the findings, assumptions, and methodologies for each line of business reviewed. This report not only highlights the TCoR for each option but also provides a 'premium-to-beat' for alternative programme structures when premium information is unavailable. The interactive results delivery platform further enhances the decision-making process by allowing organisations to directly compare different retention options. In summary, Aon's CRIsP offers public sector organisations a structured approach to reassess their claims retention strategies, potentially leading to significant cost savings while maintaining an appropriate level of risk management.