Risk Financing Decision Platform
Our Risk Financing Decision Platform helps you manage your total cost of risk by enabling more informed, data-driven decisions.
Balancing Risk Retention and Transfer
Finding the right balance between risk retention and risk transfer is key to maximizing organizational performance and navigating volatility. Our Risk Financing Decision Platform (RFDP) is designed to help you achieve your organization’s financial objectives.
How Our Risk Financing Decision Platform Works
Our solution is bespoke to your organization’s risk profile and uses actuarial modeling techniques and market pricing indications to ensure theory meets practice. Three key steps link financial insight, actuarial analysis and insurance market factors together:
- Risk Tolerance: We establish your organization’s ability to retain risk linked to corporate financial objectives.
- Loss and Volatility Modeling: We generate a detailed picture of your current and future risk profiles, individually and across your portfolio.
- Program Design Enhancement: We compare the cost and benefit of available risk management and insurance program options enabling you to make more informed decisions.
Benefits of RFDP
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Visibility into the Full Range of Potential Loss Outcomes
We use data simulation to generate a complete picture of possible loss outcomes, making sure you are well-informed.
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Health Check of Current Risk Transfer Strategies
We analyze your risk transfer strategy to ensure it is fit for purpose and reflects the latest market conditions.
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Insight into Available Risk Transfer Programs
We compare available risk transfer programs across the market to help you optimize your total cost of risk.
Helping You Make Better Decisions
We help you make better decisions that could protect and grow your business. Incorporating RFDP into your insurance strategy decision-making process can deliver real benefits.
Many of our clients have successfully used this approach to give them the clarity and confidence needed across their organization to support future financial objectives, manage costs and stabilize the volatility of key risks.
RFDP Client Success Stories
A large food and beverage client with two captives was renewing their insurance program and asked Aon if their structure could be more efficient. We undertook market analysis and an actuarial review for each line of business using RFDP. We modeled the impact of changes in expected losses and cost of capital to identify the most efficient program structure. The client increased retentions, with an initial 4% reduction in premium. A further 13% annual cost reduction was applied based on the new efficiencies.
A consumer goods client had a new CFO that was keen to assess their organization’s insurance program with an independent, data-driven view of risk tolerance. Aon completed an RFDP exercise across property damage and business interruption, private placement life and marine, including natural catastrophes. The study estimated tolerance to unbudgeted loss and established a framework for optimum insurance purchasing. With reduced volatility and a better understanding of the market around their total risk cost, Aon helped reduce their annual premium costs by 5%.
5%
With reduced volatility and a better understanding of the market around their total cost of risk, Aon helped a consumer goods client reduce their annual premium costs by 5%.
What's New with RFDP?
To meet the growing demand for more accurate business intelligence in a challenging and volatile global landscape, the latest version of RFDP has some great new features and functionality behind an improved user interface.
- The user journey is more responsive and interactive to help quantify your total cost of risk.
- Users can compare their current insurance portfolio with others in real-time, measuring insurance program benefits versus cost.
- Offers the flexibility to instantaneously mix and match different insurance structures (e.g., limits and deductibles), including alternative risk transfer structures in a bespoke portfolio.
In the current economic climate, it is crucial for companies to ensure they receive value for money from their insurance program and align risk transfer strategies with their risk appetite.
FAQs
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Who can RFDP help?
RFDP is primarily aimed at optimizing large companies’ (USD $1 billion or more in annual revenue) major placements, for example, where premium spend exceeds USD $1 million per class.
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What data is required?
Loss history, exposure data and policy information (limits, retentions, coverage, and premiums) are required to deliver accurate output along with key financials and KPIs. For existing clients, Aon can typically source this data internally.
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How do I find out more?
If you want to learn more about RFDP and how it can help your organization manage risk, contact us using the link below, and a team member will get back to you to arrange a conversation.
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$1B
RFDP is primarily aimed at optimizing large companies’ (USD $1 billion or more in annual revenue) major placements, for example, where premium spend exceeds USD $1 million per class.
