Service to be provided:

Pinnacle can assist you in developing a method for allocating premium expense and/or self-funded claim costs to the responsible subsidiaries, divisions and/or departments. Such allocation methodologies are based upon both risk exposure and actual loss experience. Should you have such a system for allocating these expenses, Pinnacle can evaluate your current system along with the financial and motivational requirements in place and present any applicable recommendations that would allow for refinement.

Why should such a service be considered?

In the interest of cost accounting, if you desire as much identifiable cost be allocated throughout the organization as possible, developing such a methodology that is fair, reasonable and equitable is prudent management. It allows for a more accurate determination as to the profitability of the business unit and holds management accountable for risk management expenses. Our experience has been that when these costs are allocated to the subsidiary, division or departmental level, not only is there a more accurate determination as to profit and loss, but since these expenses have an impact on managements incentive based programs, a renewed interest in controlling expense and loss control is seen, which benefits the corporation at-large.