They must also have a benchmark and have a clear recognition of their position. They must understand and examine business options and develop a business and capital plan and, most importantly, they must implement those plans. DFA is a tool that can help in this evaluation. It can be used to determine if the difference between actual and planned results in prior years was the result of a string of bad luck or just unrealistic planning. There is also a broad business trend toward more rigorous, quantitative analysis.
Precision invites increased risk-taking.
However, Collins pointed out, DFA models provide thoughtful, sophisticated analysis, and the development phase forces companies to think about strategic drivers and correlations. Results can provide rich data for strategic decision-making. It provides concrete evidence supporting decisions and assertions. The Casualty Actuarial Society is an organization dedicated to the advancement of the body of knowledge of actuarial science applied to property, casualty and similar risk exposures. All rights reserved.