Apply loss modification factors

Perform sensitivity analyses on potential losses by applying a loss modification factor or factors directly to ground-up losses produced by our models.

See Loss Modification template for information about loss modification templates, including how the loss engine applies the specified loss modification factors. It also describes how to create, edit, import, and export the templates.

The loss engine scales the entire ground-up distribution, not just the mean loss, and applies all policy conditions to the modified losses. It does not cap the modified losses at the total insurable value (TIV). Any loss modification factor that is applied to losses from a peril applies also to losses generated by the respective sub-perils.

Users, such as researchers, whose application roles are system administrator or business unit administrator, create loss modification templates in the Administration Console or when creating a new detailed loss analysis. The loss modification templates define the rules for applying the loss modification factor. Researcher may use this function to try out multiple loss adjustment factors for a particular model. When modeling portfolios, non-administrative users, such as analysts, select from the list of recommended loss modification templates in Analysis Settings > Flexibility > Loss Modification Factor. While they can view templates, they cannot modify templates unless they have the appropriate application role.

Note: Only administrative users can create loss analysis templates that specify loss modification options.

Loss analysis results can include the original AIR results and the modified results; you can choose not to include the AIR loss results.You can use modified losses in Loss Group, Marginal Impact, and CAT XOL analyses. You can export modified loss results to company loss files (CLFs), to *.csv files, and to databases. The loss databases contain the modified results. The analysis logs include the loss modification rules defined in the template and the number of affected locations.

Procedure

  1. Create a new detailed loss analysis.
  2. In the Analysis Settings pane, navigate to the Flexibility area.
  3. In the Loss Modification Factor list, select a template or templates or leave the default (None).
    If you have administrative privileges, you can click and create a new loss modification template.
  4. [Optional] Select a baseline analysis.
  5. [Optional] Leave the Include standard AIR Detailed Loss Analysis Result check box selected (the default) or clear the check box if you do not want to generate the standard AIR detailed loss results in addition to the modified loss results.
    You can only export modified loss analysis results from Touchstone as ULFs if you select the Include standard AIR Detailed Loss Analysis Result check box.