Better Loss Prevention Investments using Exposure Analytics

 In Brokers, Case Studies, Risk Managers

Following a series of hail-related losses, Dave, Risk Manager for one of the largest auto retailers in the U.S with over 360 retail outlets, decided to invest in hail tents as a loss prevention measure. As providing hail tents for every location was cost-prohibitive, the critical question was how to prioritize locations – which locations should receive hail tents this year, to make best use of the available budget? An additional concern was how the potential for climate change might impact loss control and business resiliency plans going forward.

Historical claims data provided a first level of insight, but Dave was concerned that recent history might not be the best predictor of future losses. The Exposure Analytics module in EigenPrism was used for a deeper dive into the issue:

  1. First, a comprehensive view of hail hazard at all locations was generated, based on an analysis of 60+ years of historical data
  2. The analysis also looked at both the 5-year and 10-year historical frequency and severity of hail size that typically drive automotive damage
  3. Historical perspectives were also analyzed to explore the potential impact of climate change and adjust, if necessary, the company’s loss control and business resilience programs

Armed with this report, Dave was able to zero in on 33 locations to install the hail tents. The analytical approach was the basis for determining the most efficient allocation of capital that would generate the highest return to the shareholder.

“I wanted to let you know the report you generated related to hail at each of our stores has been invaluable!  It was very well received in London by our insurance underwriters, and the report has formed the foundation for our capital plan for adding hail tents to 33 stores…”

Dave, Risk Manager, Top Auto Retailer


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