"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.
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.
Mr. McHugh has worked with actuaries and reserve modelers over his career and is qualified to assess reserve adequacy. Conducting file reviews with the focus on reserve adequacy for insurer's and employers, he is routinely successful at converting this expertise directly into program savings.
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- 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.
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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.
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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.
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