Risk Management Audit

					Audit Training Workshop

Presented by:
Citadel Risk Management, Inc.

                 Citadel Risk Management
    What We Are Here To Do

   Get an overview on the when’s and why’s to Audit.
   Go over some of the things you should know about
    setting up an Audit.
   Actually work with a team on a real Audit.
   Present your findings to your co-delegates as well
    as two legal experts.

                        Citadel Risk Management
                 Your Facilitators

   Art Coleman: President, Citadel Risk Management

   Nigel Curtis: Executive Vice President, Citadel Risk Management

   Frank Pecht: Business Project Manager, Citadel Risk Management

                               Citadel Risk Management
                Why Audit?

   Because you can!
    – It is your only remedy under the contract to get
      quality information.
   Has anyone ever heard of the “Request for
    Information” Clause?
   If you do not Audit you may have a hard time
    proving prejudice later on.

                       Citadel Risk Management
                Why Audit?

   Pre-commutation – to verify reserves and to see
    what is driving IBN(E)R.
   When the results are far worse than originally
   When questions go unanswered or answers are
   To verify terms and conditions.

                        Citadel Risk Management
    Ok – So When Is a Good
        Time to Audit?
   Who said: “Vote Early and Vote Often?” (Was it Al
    Capone, Mayor Daley or William Hale Thompson?)
   In the famous words of Citadel Risk Management –
    “Audit Early and Audit Often!”
   Basically the answer is – the earlier the better.
   The earlier you catch any problems the more
    control you have over their resolution.

                         Citadel Risk Management
How to Start the Process?
   Plan, Plan & Plan Some More!
     – Get the “buy-in” from key department heads as
       to the process and how Audit results will be
       evaluated. The best results come in cases
       where there is a Senior Management Sponsor for
       the Audit (kind of like the Godfather);
     – Determine the Audit Leader;
     – Decide what type of report will be generated
       (Full, Executive Summary, etc.)
     – Define the goals of the audit. Determine whether
       the audit is Claim, Contract, Program or Cedant

                       Citadel Risk Management
  Planning the Process

 Allocate resources (split the team into Claims,
  Accounting, etc.)
 Talk to all Legacy and Operational resources
  (Underwriters, Actuaries, Legal, etc. – pick their
  brains – do a Mr. Spock mind-meld!)
 Prepare the Audit Database

                   Citadel Risk Management
The Audit Database

      Citadel Risk Management
 Starting the Process

Organize until it hurts!
   – Establish contact with the Cedant.
       Who will be the primary contact for the audit?
       What are their rules (Start time, copying,
        requests for additional info while on-site, etc.)
   – Create a Starter Pack
       Consists of Audit Scope, Contracts, Policy &
        Claim Registers, experience reports.
   – Make selections of material to be reviewed while
     on-site. Obtain current data from Cedant if
                   Citadel Risk Management
   Organizing the Process

Making Selections:
     Review the most information in the most
     efficient manner;
       Request claims that cover multiple treaties
         (i.e., Q/S & XOL);
       Claims that cover multiple years (Products,
         Asbestos, Environmental);
       Claims with highest ITD Paid Losses;

       Claims with highest current reserves;

                      Citadel Risk Management
    Preparing for the Audit
   3 Days before the Audit, check with the Cedant’s
    Audit Coordinator to ensure that the material
    requested is (or will be) ready;
   Other Requests:
     – Underwriting Files for each Claim requested;
     – For proportional business, ask for assumed
       accounting files;
     – Ask for interviews with key personnel (Claims,
       Actuarial, Finance, etc.)
     – Access to Company Systems.
                        Citadel Risk Management
              While On-site

   Audit Leader to ensure that team is getting through
    what they need to do;
   Check-in with Audit coordinator at least 2 times a
   Open discussions among Team Members is
    Welcome (and encouraged!). There are NO stupid
    questions on an audit!

                        Citadel Risk Management
             After The Audit

   Hold a meeting on the first day back with the Team
    and get impressions and lay out expectations for
    the generation of the report;
   Create a list of all open copy and information
   The earlier the report is started the more successful
    it will be;
   After the report is completed, hold a meeting with
    all of the department heads and pass along the
    findings of the audit.

                        Citadel Risk Management
            Audit Training
Citadel Risk Management can provide your company
with a specifically designed training course to
develop your staff into fully-trained reinsurance

            Contact us to schedule a date:
           Art Coleman – (203) 595-9650
           Nigel Curtis – (215) 343-8429
           Frank Pecht – (609) 747-8710

                      Citadel Risk Management

Description: Risk Management Audit document sample