Milliman actuarial reports are reflections of the professionalism, expertise, and commitment provided by managing general agents (MGA) and program managers (PM) to their book of business and their approach to their work. They hire Milliman when they need reliable and credible independent loss-ratio projections and profitability analyses as well as development of rates, rating plans, and price monitors.

We have experts with in-depth knowledge of the business being written who understand the coverages from actuarial and nonactuarial perspectives. Milliman consultants analyze projected loss ratios and provide indications of profitability for both ongoing programs and start-up programs. Our reports can be powerful negotiating tools with an insurance carrier.

In one recent analysis, a direct writing company was looking for reinsurance support for the program. When the loss ratio for the upcoming policy year was projected to be below 60%, several reinsurers showed interest in participating.

Reports as negotiating tools

During challenging insurance markets, our reports are used to gain insurance company interest in a program at a time when the companies are being very selective. In addition, because we have already compiled the data for an actuarial analysis, the insurance company/reinsurer saves time and resources when doing its own analysis.

An independently projected profitable loss ratio puts the MGA or PM in a position to negotiate a better deal. If our work indicates that the book is not as profitable as expected, the MGA or PM is alerted to take action and turn it around. In such cases, we evaluate the potential effects of such actions and reflect them in the analysis.

One client had, prior to our analysis, revised its underwriting of certain classes of business. For that analysis, we provided loss-ratio projections under the new and old underwriting criteria. The results supported the client's hypothesis that the loss ratio in the future would improve.