june 2008 mac
charliemansfield
Registered Posts: 19 New contributor 🐸
Hi
Task 2.3
How do you calculate the loss adjuster cost (fee) varience when you have a range of figures?
The answer is £10000 adverse, but i have no idea how to arrive at this figure.
Does anyone have any suggestions?
Thanks
Charlie
Task 2.3
How do you calculate the loss adjuster cost (fee) varience when you have a range of figures?
The answer is £10000 adverse, but i have no idea how to arrive at this figure.
Does anyone have any suggestions?
Thanks
Charlie
0
Comments

Loss adjuster costs
budgeted costs are £250,000 for 2500 claims. (£100 per claim)
actual costs are £210,000 for 2000 claims
if you flex the budget at 2000 claims then the budgeted costs will be 2000 x £100 = £200,000
actual costs  budgted costs = varience
210,000  200,000 = £10,000 Adverse0 
I've added an explanation of the variance from my answer at the time.
This is unusual as far as the MAC variance questions go as it looks at the total cost variance, as there is not enough information to produce subvariances for efficiency or rate.
Loss adjuster cost (fee) variance
The standard loss adjuster cost per claim is £100. This does not recognise
the different cost based on the size of the claim. In May the mix of claims
included more than half that were for over £5,000. As the largest claims take
the longest time for the loss adjuster, this may explain some or all of the
£10,000 adverse variance.Sandy
sandy@sandyhood.com
www.sandyhood.com0
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