Insurance Consulting > Third-Party Liability Insurance Consulting > Cash Settlement Valuation

Rather than settling specific claims, it may be more desirable for both the insured and the insurer to agree to a full commutation of coverage or even a full policy buy-back. In many respects, the analyses and support for this process are similar to those in a normal claim context. However, the complexity of these agreements brings additional scrutiny and requires corresponding additional analysis and details:

Discounted Cash Flows – LLM looks closely at the timing of expected future cash flows, prevailing interest rates, and credit risk to determine appropriate present value settlement ranges.

Enhanced Sensitivity Analyses and Decision Trees – We can create a virtually unlimited combination of possible outcomes to assess the impact of coverage issues, variability in expected liability, allocation assumptions, and present value inputs.

Increased Scrutiny on Liability Estimation – A commutation requires enhanced comfort for both insured and insurer in understanding the methodology and results of potential future, known, and unknown liabilities.

Open Communication Lines – LLM can assist in reaching a resolution of coverage under more favorable terms in advance of a formal demand by approaching the counter-party early in the process.

Provide Enhanced Support/Negotiations – In order to reach a final resolution quickly and at minimal cost, LLM will work closely with clients to provide full support in justifying or countering the claim to help limit the usual “back-and-forth” process.

Contact us about your specific case needs: (440) 498-0171 info@llmconsult.com