McHugh Consulting, Inc.    

Reserve Adequacy Reviews

Accurate reserving is one of the most important components of the claim management process.  Reserves or estimates must reflect the      claim handler’s best judgment of the probable ultimate pay-out of the claim at any point in time.  Estimates must be the result of evaluation of all key areas of development of a claim. Each aspect of a claim; indemnity, medical and expense, must be evaluated on its merits and must be continually updated and refined based upon the current facts. Accurate reserving is essential to providing a better financial picture for the workers' compensation carrier and the employer.  Mr. McHugh has worked with actuaries and reserve modelers over his career and  is qualified to assess reserve adequacy.

Mr. McHugh can conduct file reviews with the focus on reserve adequacy for insurer’s and employers.   

Key Benefits

• Confirming the accuracy of a Self Insured, Employer’s, or  Insurers reserves is a direct link to your bottom line. The reserves must accurately reflect complete exposures in order to ensure that there are sufficient funds for the insurer to remain financially solvent.              Insurer’s premiums are based on total incurred reserves as well as the loss history, an inaccurate reserve base will result in inaccurate premium charges to the employer.   

• Within six months after policy expiration Employer’s have the legal right to audit their open workers' compensation claim files to validate  reserve accuracy. This may result in a change in reserves for unit statistical plan filing purposes, and impacts the experience        modification factor of the employer. 
• Excess file identification and reporting impacts both the insurer’s and employer’s bottom line.  Mr. McHugh has the experience to identify cases that may pierce insurance excess layer’s so they can be reported timely and reserved accurately.  

Send mail to dennis@mchugh.net with questions or comments about this web site.
Last modified: February 14, 2006