Over the last 15 years the concept of commuting liabilities has developed from a relatively obscure and little-trusted concept to a key and widely used technique to assist insurers in exiting historical exposures. EMB’s partners and senior consultants have been at the forefront through the development of rigorous and robust actuarial techniques to demonstrate to both sides the mutual benefit that would accrue from the commutation.
Our experience of commutations ranges from the shortest tail personal lines accounts to hugely uncertain and poorly documented US liability reinsurance accounts.
We have assisted our clients to commute with some of the world’s largest reinsurance companies and to commute entire reinsurance programmes consisting of up to 100 reinsurers.
More recently, we have been asked to advise on and calculate the appropriate level of risk premium to be included in such transactions. It is also now possible to consider the full statistical range of outcomes and demonstrate the effect of commuting on the capital position of the company using some of the extremely powerful actuarial tools now available. This increases the depth of management information available to our clients.
