In preparing next year's budget, the hospital CFO has contacted the risk manager for a...

According to Health Care Risk Management standards supported by ASHRM and the American Hospital Association Certification Center, projecting contributions to a self-insured retention fund requires actuarially sound financial forecasting. Actuarial reports use historical claims data, trend analyses, loss development factors, and exposure projections to estimate future liabilities and required funding levels. Loss run reports provide detailed historical claims information, including paid losses, reserves, and claim status, which serve as foundational data for actuarial modeling.

Professional and general liability premiums are relevant to insured layers above the retention but do not determine funding requirements for the retained portion. Frequency and severity analyses of pending claims are important components of actuarial evaluation but, standing alone, may not capture long-tail development or incurred but not reported claims. Total incurred losses for the current year provide limited insight without considering historical patterns and future projections.

Risk financing objectives emphasize accurate funding of retained risk to ensure financial stability, regulatory compliance, and protection of organizational assets. Therefore, actuarial reports, supported by comprehensive loss run data, provide the most reliable basis for determining projected contributions to a self-insured retention fund.