Albert House, current workers' compensation carrier has provided Albert House, with a forecasted amount for 2024's workers' compensation claims. The total projected losses for 2024 are almost twice the firm's average incurred losses for the last three years. The owners of Albert House would like for you to provide the following analysis. 

a. Using the data provided about the firm's losses, please forecast total losses for 2024. A summary of workers' compensation claims is provided at the end of the case. A spreadsheet has been provided to help you with this process. You can simply forecast total losses. You do not have to forecast both incident rate and severity as you did in the homework. You can just use total losses in the regression. Please describe your calculation in your written answer as well as cut and paste your regression output into the answer. 1 NOTE: The workers' compensation carrier does allow the firm to use an excess loss limit of $50,000. This means that both the paid and incurred losses should be capped at $50,000 for each claim. The claims workbook contains a listing of all of workers' compensation claims recorded for the last three years. The loss limitation has been applied to the claims entered into the workbook. A copy of the loss runs, with added detail, is contained in the case. If you wish, you are welcome to make changes to the losses that you think are important, just comment on the changes and reasons for the changes in your write-up. You are not required to do so. Note that I have done most of the data entry for you so that you can just focus on the forecasting of 2023 total losses. Again, you DO NOT have to forecast incident rate and average severity. You can just forecast total losses or the transformed version if needed. Please copy and paste your table for the data, graphs, and regression output in the text of your answer.

b. In your written answer, you should briefly describe the process you used to forecast total losses, any assumptions made, and your results. You should comment on the validity of your forecast as well as any potential limitations. You should include key statistics in the answer.

c. Describe other factors that should be considered. At least two.

d. Based on your findings, do you agree with the workers' compensation carrier? If so why, if not, why not. Justify your answer. Make sure to include the appropriate statistics and graphs. (The text portion of parts a-d will likely be lengthy)

e. Albert House, insurance carrier has suggested that they consider using loss control to reduce their losses. The owners of Albert House, feel that since this is just the insurance company's way of trying to get out of paying future claims and that there is no real benefit to Albert House. Provide a (tactful) response to the firm outlining why you agree or disagree with them. Be sure to justify your point of view.

The Albert House, Inc. A summary of workers' compensation losses for the past three years is included in this case. When analyzing the workers' compensation injuries, one of your analyses should specifically include back injuries. In categorizing the claims, look for types of injuries that result in claims with similar levels of severity. When analyzing the workers' compensation portion of the case (WORKCOMP), use $50,000 as the assumed loss limit. Workers' compensation experience has been poor for several years. In 2020, the experience modifier was 1.32. In 2021, it jumped to 1.75. Claims and Losses Workers' Compensation Current Year (2023) Incurred Paid Open/Closed Neck pain (ergonomic concerns) $ 7,100 $ 5,600 Concussion (trip & fall) 53,800 15,800 0 Cut finger (slicing ingredients) 4,000 2,100 C Burn on hands (hot water spill) 8,300 3,000 Burn on hands (grilling accident) 10,200 8,700 C Burn on hands (hot oil splatter) 75,800 41,600 Pulled back (lifting boxes) 19,500 6,400 C Eye injury (oil splatter) 23,100 21,000 Broken wrist (slip & fall) 21,200 18,700 Dislocated shoulder (falling off ladder) 19,400 11,000 Eye injury (cleaning solution splatter) 15,200 6,300 Twisted ankle (trip & fall) 25,200 15,400 C Cut finger (slicing ingredients) 4,900 3,800 Pulled back (unloading boxes) 9,700 3,600 Pulled back muscle (moving tables) 14,200 6,200 Carpal tunnel (typing) 20,000 14,000