Our federal government and regulatory services span:
Regulatory Compliance
External Audit
Compliance Shoppers
Risk Assessment
For more information on our offerings,
contact us at:
Analytic Focus LLC
1116 20th Street South #406
Birmingham, AL 35205
Phone: (205) 672-9253
Fax: (205) 672-9255
E-mail: info@analyticfocus.com

Analytic Focus LLC
5218 Sagail Place
San Antonio, TX 78249
Phone: (210) 465-7838
E-mail: info@analyticfocus.com
Analytic Focus LLC
121 N Washington Street
Suite 300B
Alexandria, VA 22314
Phone: (703) 549-2682
Fax: (703) 483-3977
E-mail: info@analyticfocus.com

Risk Assessment

Businesses, banks, insurance companies, and government agencies all recognize that the future is unknowable. Alternative outcomes for actions taken can be quantified and analyzed to determine how likely they are. This comprises the basis for risk assessment – how much does one stand to gain or lose, and how likely are the different outcomes that might result.

In a complex world, assessment of the likelihood of events based on the past, on changes in external conditions, and on actions taken becomes the basis for choosing a course of action in financial dealings. For some purposes, a planner wants to know the most likely outcome or the best way to develop a plan to obtain a maximum return. Alternatively, he may wish to know the worst outcome that might occur so he can hedge, reserve, or insure against that eventuality. A reasonable assessment of risk helps avoid a catastrophe in the future. We help financial entities assess risk and plan using optimization tools applied directly to the problems they face.

Case Examples:


Benefits Management: In the U. S. Office of Personnel Management (OPM), all government retirement and health benefit programs must be audited for soundness and to estimate the frequency at which improper payments are made. For retirement programs, we selected samples of claims for review from the two major retirement systems, the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS) and determined that both are sound and are in no danger of being depleted. For health programs, we designed sampling and audit systems for 88 separate health benefits carriers that allowed estimates of the degree of improper payments in each system. Our results could also be aggregated to a national level to give an estimate of improper payments for the U.S. government. Reports to Congress and the President indicated soundness of the fund systems and error rates well below the statutory requirements.

Insurance: A manufacturer used a liquid degreaser on circuit boards and drained the residue into ordinary storm drains. After 30 years of use, the EPA changed its rules and declared chemicals in the degreaser to be carcinogenic. The chemicals washed into the groundwater over decades and slowly spread under a major city. During this time, people moved in and out of the area, were born and died, all in the area over the spreading groundwater.

With two overlapping flows, one hydrologic, one demographic, the question for the insurer was how many people were potentially exposed. Our analysis showed that over 60,000 people were exposed, but only 5,000 were exposed for more than five years, the key trigger for biological hazard. The insurer was secure in its reserving, could report minimal risk to state regulators, and had a means of responding to plaintiff attorneys when a class action was considered.

Insurance: For a chemical company that had a release of an airborne particulate, the question the insurer asked was how much would the total litigation cost if a class action case was filed, the likely cost under different scenarios such as loss and appeal, and how much would individual negotiating items cost, such as medical monitoring and property settlements. The insurer and the company they represented was able to use this information to determine when to settle and how to negotiate. This information sped up the negotiation process and allowed both sides to come to a settlement rapidly.

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