Sigma Risk


Risk Management and Insurance

Areas of Practice


A significant portion of our consulting practice is in the area of corporate insurance. We believe the knowledge and experience of our key personnel in corporate risk and insurance management is second to none. We keep on top of changes in the scope of policy wordings, the law as it pertains to insurance and the prevailing insurance market conditions in Canada, the US and internationally.

Insurance Audits

An insurance audit provides a detailed grass roots analysis of the corporate insurance program and the scope, amount and quality of coverage of insurable-type operational risks. Will the insurance respond to the full range of operational risk exposures? Are the limits adequate for worst case loss? Are the various policies integrated in a seamless manner? Are there any exclusions, warranties or other terms that could potentially threaten full indemnity? Are deductibles and self insurance arrangements optimized? Are premiums and broker fees reasonable? Are there opportunities for improving Value-For-Money? 

A line-by-line technical audit of each insurance policy wording examines each exclusion, condition, restriction, basis of loss settlement and insuring agreement for its potential effect on indemnity following a loss. We evaluate whether all commercially available coverage extensions have been incorporated where required. 

Property and business interruption values are audited for adequacy. Contingent business interruption exposures are identified and assessed. The full range of potential liability risk including E&O, D&O and cyber liability is assessed. Insurance representations, warranties and disclosure are reviewed. Insurance rates are evaluated for competitiveness, against both prevailing market rates and benchmarked peer group rates. Policy documentation, schedules and invoicing is audited for accuracy and completeness. Broker performance is benchmarked.

In summary, a Sigma Risk insurance audit thoroughly examines every component of corporate insurance management: coverage, cost, quality and service. 

Insurance Purchasing and Tenders

Often, clients ask us to analyze the insurance purchasing process and evaluate its integrity and results: from disclosure, representations and marketing style to rates, insurer security and broker services. We ensure our clients obtain competitive advantage in insurance costs, coverage and quality, often involving an insurance tender, or more commonly, a brokerage RFP.

We have assisted our clients in more than one hundred and fifty corporate insurance competitions using best practice processes. Our reputation is for a smooth, well prepared and incident-free tender with quality group consensus and results.


The role of insurance in Private-Public Partnerships is unique. There are dynamic and strategic issues not encountered under shorter construction, rehabilitation, operation and maintenance contracts. P3 contracts and their risk allocation can be complex to agree and then define. Getting the right balance between insurance security and cost is so important because it is for thirty years.

Sigma Risk has considerable knowledge and experience in P3 risk and insurance, both in the contract formation stage and in ongoing monitoring of infrastructure P3s. Our P3 experience includes transportation infrastructure, marine operations, health care and utilities.

cyber risk & insurance

Over the past ten years, cyber risk has increased, as has the array of cyber insurance products. Sigma Risk consultants have remained on top of these changes, as well as data on breach losses and the changing legal liabilities associated therewith. Cyber risk assignments have included those in the financial institution, health care, municipal and energy sectors. We have intimate familiarity with available cyber insurance policy forms, as well as the cyber coverage already provided under conventional property, general liability, crime, fidelity, errors and omission liability insurances and even performance bonds. Our cyber risk assessments skills are excellent. 

Insurance Claims

When a corporation has a large insured loss, it faces the challenging process of quantifying, documenting and proving  the insurance claim. From time to time, adjusters and their experts can be demanding, slow and even occasionally adversarial. Their interpretation and quantification of insured loss costs are generally made with their insurers' interests in mind. Often some aspects of insured loss are either forgotten or unfairly underestimated. As well, an insured corporation often underestimates the time, effort and complexity of successfully making a large property, business interruption, pollution, machinery breakdown or extra expense insurance claim. 

Sigma Risk has the large claims management experience, technical knowledge and objectivity required to assist with claims assembly and quantification and to obtain fair, expeditious claims settlement, particularly on business interruption claims. We have calculated, documented and settled more than sixty large ($10 million - $1 billion) insurance claims. Our fees are generally covered by the professional fees extension in the policy.

Risk Assessment

Risk assessment is an important step in the risk management process and often a critical one for fully informed risk management decisions. Sigma Risk applies its wide range of analytical and technical skills to identify and quantify the spectrum of insurable property, business interruption, and liability risk: from earthquake to crime, from fire to third party liability, from D&O to pollution liability. Using quantitative modelling and simulation techniques, we conduct an in-depth analysis of the risk exposures of our clients. We do not just identify risk - we measure, model and stratify loss expectancies in a practical way for risk financing and insurance decision-making purposes. 


Sigma Risk has developed a particular expertise in the valuation of assets and insurable earnings. Our knowledge has been gained by working with a wide range of international and domestic clients. As engineers, we have conducted replacement cost appraisals and economic valuations for insurance purposes on a wide variety of assets, from commercial real estate and manufacturing facilities to power plants, telecom networks and even offshore oil and gas platforms. 

Risk Engineering

Our expertise in the area of risk assessment and insurance is enhanced by the engineering background of our consultants. Sigma Risk is a licensed consulting engineering firm. The majority of our consultants have, inter alia, an engineering background. We believe that this background helps us better understand the technical and process nature of our clients' business and enables us to perform a complete and accurate analysis of all their operational risks. Not everyone believes in a rational, engineering-based approach to risk management. Those folks may not be so interested in our services.


Risk modelling is an advanced risk assessment technique that is useful for risks whose event probabilities and consequences can be quantified or estimated from engineering and loss data using algorithms. Risks where modelling is often a value-add include catastrophic risks (flood, earthquake, hurricane, ice storm, etc.), hazardous material releases, general or pollution liability losses, low frequency events (e.g. nuclear power plant meltdown) or even some types of enterprise risks (notably market and commodity price risk). 

Sigma Risk has built many dozens of these risk models, using conventional modelling software (PHAST, BREEZE, SLAB, DEGADIS, @RISK, MS XL).

Risk Control

Our risk control work includes a wide variety of operational analyses to reduce loss exposure. These include business continuity disaster planning, loss control planning and safety design analysis. We help our clients technically examine risk control and loss prevention options within the economic context of total cost of risk. We occasionally assist in implementing them effectively.

At Sigma Risk, we have helped more than a dozen of our clients in developing efficient and effective business continuity plans for all perils: hurricane, fire, earthquake and flood. While based on recognized and generally accepted templates for business continuity, our approach entails customizing the business continuity plan to the needs of our clients to minimize the effects of a catastrophic loss. 

Climate Change

Climate change is largely a political issue, but becomes a corporate operational risk issue when storm intensity, rainfall and weather intensity (more pronounced in northern climes) and flood and windstorm risk all increase. Sigma Risk has a fairly renowned  climate change expert as an associate consultant - Tamsin Lyle. Each of our clients has unique climate change risks ,but they have them, in some form or another nevertheless.

Enterprise Risk Management

Sigma Risk consultants are intimately familiar with the framework and implementation of all of the various Enterprise Risk Management (ERM) models: COSO, Basel II, ISO 31000, AS/NZS 4360 and other variations from governmental agencies. Sigma Risk has helped a wide variety of organizations implement ERM from scratch, from petroleum companies, public entities, risk pools, and financial institutions, to utilities and international development agencies. 

We are experienced facilitators in the range of enterprise risks: strategic, financial, organizational, operational, reputational and market risks of all types. We know how to run an entertaining facilitated ERM workshop, how to build and populate risk registers, how to develop corporate risk policy, tolerances and metrics, how to frame decision-making on risk mitigation and how to select the key risk indicators necessary for ERM reporting. Our facilitated risk assessment processes are rather more rigorous than other accounting-based and insurance broker-based ERM practicioners. All of our several dozen ERM projects have been successful, on time and on budget. We have been involved in updates on nearly all.

Project Risk Management

Several of Sigma Risk's engineers are former project engineers and certified PMI Risk Management Professionals (PMI-RMP). We are experienced and confident in applying the PMI framework and other project risk management frameworks to projects of all shapes and sizes, be they construction projects, new technology development, energy development projects or even mergers and acquisitions. 

The risk management framework and processes of project management are effectively the same as for corporate or enterprise risk management. We are familiar with life-cycle project risk through our work on dozens of major projects: multi-billion dollar oil sands developments; commercial property developments; international energy projects; petrochemical plants; electrical and gas utility projects; and group self insurance pool development.

We work for both project owners and financiers. Indeed our largest project risk assignments have been for project financiers or approvers.

Specialized Advisory Services

Sigma Risk works with its clients to define and develop all aspects of an effective and cost-efficient risk management program on a corporate level. Our expertise and experience in certain specialized management consulting areas is presented below. 

lender insurance reviews

On behalf of lenders and investors (and sometimes regulators), we conduct due diligence risk and insurance audits on the borrower's operations, operational risks and insurance security. We have worked for all of the major banks in Canada and for banks all over the world (including the World Bank). We go beyond the checklists used by other insurance auditors and look at how the borrower's operations actually fit within the four corners of its insurance policies, particularly as respects exclusions, warranties, co-insurance and misrepresentation. We look for black swans. 

Risk Financing

We are conversant with all of the risk financing products available in the marketplace, for instance: self insurance, captives, industry captives and self insurance groups, financial insurance, finite risk reinsurance, rent-a-captives, alternative risk financing vehicles and reciprocals. Our objective in this field is to assist in selecting the least cost, most reliable portfolio of risk financing components. 

Insurance Program Development

For new ventures, companies or projects, Sigma Risk offers turnkey grass roots risk and insurance management development, including assembly and development of risk and insurance information, asset appraisal, insurance program design and specification, purchasing and tendering, broker management and ensuring full implementation and documentation of the program, including a procedures manual. We have created first time insurance programs for utilities, engineers, contractors, airport groups and oil and gas companies.

Group Risk and Insurance Pooling

For groups seeking analysis and advice on group insurance programs (be they reciprocals or group captives), we offer audit or strategic analysis services, either at the feasibility stage or on ongoing program. We can analyze, advise and assist in the structural, actuarial, legal and rating aspects of pooling as well as in reinsurance strategy and pricing. 

Mergers and Acquisitions 

How to consolidate insurance programs quickly at least cost is a challenge, but one often left for later in an acquisition, thus sacrificing immediate perspective and benefits. We can assist in, or even turnkey, the due diligence requirements for data collection, risk assessment and loss analysis of a proposed M&A. 

Rating and Cost Allocation

Sigma Risk helps its clients in developing workable and defensible allocation of forecast self insured loss, insurance premiums and other risk costs amongst the business units of an organization or even beyond. Our actuarial skills and knowledge of commercial underwriting practices and rates can provide a defensible, equitable and practical rating and cost allocation scheme. 

Actuarial Analysis

Sigma Risk provides actuarial analysis to corporate self insurance plans and captives for financial reporting purposes on all property and casualty lines of business including workers' compensation, general and professional liability, products liability and auto liability. The intent of our analysis is to provide corporate management with reasonable budgeting, accrual and funding indications for corporate self-insured or captive insurance programs. We also perform captive feasibility studies, cost/benefit analysis of alternate retentions, and the periodic reporting on loss development and other metrics to assist in the identification and management of loss trends and other issues. 

Organizational Analysis

Using objective industry standards, peer group benchmarking and our experience, we advise our clients on the amount and nature of the administrative aspects of risk management: staffing; function; information management; reporting and liaison with the organization. We use a disciplined and rigorous internal audit approach to identifying strengths and weaknesses, threats and opportunities in the risk management function. 

Decision making & FACILITATION

Several of Sigma Risk's consultants are trained in decision theory and practice. We apply this knowledge to help clients make high quality decisions under uncertainty. We follow the Stanford decision process of proper frame, doable alternatives, adequate information, defined values and rational algorithms, including risk modelling of the major risks. We have assisted many of our clients on multi-million investment, financing, self insurance and risk mitigation decisions.

Business Continuity

Often, after we’ve done a risk assessment, a client will ask us to prepare a Business Continuity Plan. 

Business continuity plans follow a generally accepted format with generally accepted content. The office, IT and communications aspects are generally straightforward in terms of the business impact analysis, recovery time objectives and resource planning. Where BCPs may increase in complexity is either when catastrophic risks (flood, hurricane and storm) are involved or when production or supply chain components and their replacement time become challenging.

We’ve done quite a number of BCPs, ranging in size from 10 pages to 100, in the retail, municipal, engineering, construction, energy and financial institution sectors.

Expert Witness

Sigma Risk consultants have acted for counsel in an expert witness capacity on more than a dozen occasions in the area of generally-accepted risk and insurance principles and practices and on insurance policy interpretation at the field level.