Tag Archives: Richard Frese

How can self-insureds benefit from independent actuarial services?

Companies should try to avoid any conflict of interest when subscribing to the principles under the Sarbanes-Oxley Act. When determining if an actuarial firm is independent, a company can ask two questions: Is the actuarial firm a provider of another service to your company? Does the firm present any possible conflicts?

In the article “Why independence matters in actuarial services,” Milliman’s Richard Frese and Tony Bloemer discuss how actuaries in various roles interact with key decision-makers and the business benefits of working with an independent actuary.

Projecting workers’ comp losses for self-insureds

Self-insureds that understand the factors used by actuaries to project workers’ compensation losses can better integrate them into their projection processes and benefit from insightful discussions with actuaries. Milliman consultants Carly Rowland and Richard Frese offer some perspective in the Business Insurance article “Ten considerations for projecting self-insured workers compensation losses.”

MPL actuarial valuations in M&As

With mergers and acquisitions (M&As), it is critical that the medical professional liability insurance program be properly accounted for. Unpaid losses and loss adjustment expenses associated with the program can be a significant item on a balance sheet. There can be both substantial benefits and dangers associated with M&As that are important for management to consider in the preliminary stages of the M&A process. Milliman’s Richard Frese and Andy Hoffman provide perspective in this article.

This article was published in the February 2017 issue of Inside Medical Liability.

Capitalizing on your actuarial report

In this article, Milliman’s Richard Frese and Andy Hoffman offer organizations perspective concerning critical topics they should discuss with an actuary to enhance their insurance program, better manage liabilities, and maintain appropriate actuarial analysis for the needs of their program. The authors also discuss best practices when working with an actuary.

This article was published in The Risk Management Quarterly.

Captive considerations for healthcare organizations

A captive insurance program can offer healthcare organizations several benefits such as broader coverage, improved cash flow, and direct access to reinsurance markets. However, not every organization is suited for a captive. Its management must assess the benefits and drawbacks before creating one. Milliman’s Richard Frese provides perspective in his article “Captive insurance: Is it the right choice for your insurance exposures?” He also discusses the background of captives, how organizations should choose a domicile, selecting coverage policies, actuarial analysis for loss projections, and considerations when shutting down a captive.

Managing self-insurance costs

A well-designed allocation structure can help hospitals lower self-insurance costs by distributing costs at a departmental or employee level more effectively. This article, authored by Milliman consultant Richard Frese, highlights some features that hospitals should consider when designing and implementing an allocation structure.

Setting Goals
When implementing an allocation, it is first necessary to achieve buy-in from members or departments and to define the goals. Allocations often apportion expected future insurance costs, historical unpaid claim liabilities, and tail liabilities (claims that have occurred but have not yet been reported). The finance managers should establish the goals of the allocation process to ensure program needs are met.

These goals should include ensuring that the allocation system encompasses five key features:
• A loss-control incentive that encourages safety among members
• Stability, with no significant fluctuation in annual contributions and liabilities
• Equity, as reflected in the fair treatment of all members (which does not mean that they all pay the same amount or rate)
• Intelligibility, ensuring the allocation is easily understood and readily accepted by members
• Ease of administration, allowing managers to carry out the allocation without difficulty….

Designing a Basic Structure
Allocations commonly are built on exposure, losses, or a blend of the two. Exposure often is defined as “bed equivalents” for professional liability and as payroll for workers’ compensation. Proper weights (i.e., conversion factors) translate – for example – occupied beds, outpatient surgeries, emergency department visits, and physicians into bed – equivalents. Different risk classes in payroll, such as nurses and clerical workers, also should be adjusted for. An allocation based purely on exposure is easily administered and may help keep the allocation amounts smoother over time.

An allocation using losses will encourage members to minimize losses, but may be more of a challenge to administer and design for several reasons.