Maximizing the Value of Loss Adjustment Expenses

Inflation, supply chain issues, increased catastrophic losses from climate change, and higher and higher nuclear verdicts mean that insurance carriers are facing higher loss costs and loss ratios to their premium dollar.

When that happens insurance carriers must look at opportunities to reduce the costs and expenses they can control -- Unallocated Loss Adjustment Expenses (ULAE) and Allocated Loss Adjustment Expenses (ALAE).

With ULAE they look at reducing staff or overhead by delaying expenditure on new technology or computers or closing some offices to reduce rental and utility expenses. With ALAE they look at controlling litigation, surveillance / sub rosa, or medical legal examination costs.