Some people say you can never judge the future from the past; however, risk analysts use this approach in determining future losses for businesses. Your non profit organization’s lost history can be used to forecast your future loss frequency and severity. This type of study of past data is called trend analysis and can benefit your organization by determining the loss exposures that your non profit is most susceptible.
Exposure to loss can be determined through identifying items that are subject to loss and the perils that cause them. Also, understanding the financial consequences involved with losses can help your organization prepare for future ones. Trend analysis helps determine these loss exposures so you can prevent them from happening in the future.
Low severity claims usually happen more often than severe claims. Different organizations may be subject to different loss exposures. Based on the types of operations your non profit partakes, your organization can have special risks that other organizations may not have. It is important to identify these special risks in order to enforce effective risk control. Through using proper risk management and identifying situations that can become a loss, you can lessen the chance of a loss occurring and better protect your customers. Through having fewer losses, your organization could develop a more favorable reputation and face lower insurance premiums.
Trending analysis is vital in determining your organization’s exposure to loss. By knowing the exposures of your organization, you can determine the type of losses you are most vulnerable to and most likely to come in contact with. Lamb Financial Group has a loss trending and analysis services that can help your non profit organization determine your exposures and lessen the risk of a loss. Contact us or call 866-481-5262 for more information on trend analysis and how it can help your non profit organization.