FORECASTING & MODELING
We consider forecasting and modeling in the mass tort environment distinct from our work in liability assessment. Forecasting and modeling may be used in many situations other than projecting claim liabilities. We use many different statistical, actuarial, and econometric models and technology tools in our modeling engagements. We assist companies with understanding the economic outcomes of change in litigation strategy as well as assist trusts with the asset requirements needed to fund their projected cash flows. We also have significant experience with modeling liabilities to a policyholder’s insurance coverage to determine cash flow requirements and total assets available.
Our forecasting and modeling efforts are focused in the following areas:
· Forecasting long term cash flows (matching sources and uses of cash)
· Quantifying the economic impact due to change in litigation strategy, legislative efforts or other business decisions
· Claim filing and settlement projection modeling
· Insurance allocation modeling
· Providing expert testimony regarding our analysis or our analysis of opposing expert findings
Some of our representative engagements include:
(1) ARPC was retained by a several large asbestos trusts to project the future claim filings and model the negotiated settlement payouts of the trust to determine if the trust would have sufficient assets to fund liabilities both today and in the future.
(2) We were retained by a client that was involved in acquisition discussions with a large manufacturing company. Both companies had mass tort claim exposure and significant insurance assets. We used modeling and forecasting techniques to project future claim values and matched the losses to the available insurance assets to determine the out-of-pocket cash flow requirements of the company.
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