Comprehensive Risk Analysis
Hylant helps businesses drive an increase in valuation through a high-value risk assessment and return on capital requirements for purchasing insurance.
Effective use of enterprise risk management techniques plays a significant role in achieving these objectives. How is this done?
The Framework
Our process starts with aligning the business's risk management objectives to its growth strategy. That effort focuses on:
1. Improving the management of the financial effects of risk on the business:
- Cashflow
- Earnings stream
- Asset base
2. Assessing insurance spend against the highest use of capital
There are three steps in the process:
- Identify and prioritize the risks within the organization's business strategy, including how to best manage those risks to successfully execute the strategy.
- Identify the organization's financial capacity to bear risk.
- Identify the optimization point where the use of insurance provides an appropriate rate of return.
At the conclusion of the risk assessment and financial analysis, business leaders will be able to do the following:
- Assess and quantify threats to operating performance.
- Formulate strategies to address and finance those risks.
- Transform the use of insurance into an investment decision.
The result of this comprehensive risk analysis will be:
- Development of organization-specific analytics around risk and finance that guide informed decision-making
- Risk management planning that becomes part of the organization's business planning process
- Optimized capital where insurance provides a better return than the next highest and best use
The Approach
Business Risk Evaluation (BRE) is Hylant's proprietary online software solution that assists with identifying and quantifying risk in a structured, disciplined and defined process. Specific analytics within the BRE process include:
- Identifying risk culture and appetite, including risk tolerance, targets, and limits
- Identifying and prioritizing risks affecting your organization
- Determining your organization's maximum financial risk-bearing capacity
- Predictive loss modeling
- Adjusted return on capital
BRE's enterprise risk management technique, combined with Hylant's risk optimization framework ECOR provides the insurance blueprint to maximize the value of your organization.
The Results
The outputs from the Hylant process include:
- A prioritized risk map (Figure 1)
- A pro forma of the expected cost
- Identification of the insurance purchasing point at which the firm will realize its required rate of return
- A decision support framework which defines and prioritizes key risk issues and addresses risk financing challenges facing your organization
- Creation of your organization's "Efficient Insurance Frontier" trend line. The Retention Optimization graphic (Figure 2) denotes the optimal balance of self-assumed risks vs. market-offered premiums, at multiple (potential) risk retention levels.
The Benefits
The organization will be able to improve risk management decision-making, integrate it as part of the business planning process, gain new insights into organizational risk dynamics, optimize the use of capital and ensure the effectiveness of critical risk management practices.
Trusted Advisors
Hylant team members are ready to advise you and help you confidently address your risk needs.
