In addition to the companies' historical losses, which drive an implied risk charge, the modeling exercise to support ECOR incorporates a future view of losses that may occur.
While this is a simplified process compared to the predictive modeling and analytics used in actual ECOR calculations, it is clear from this scenario that Company A experiences greater volatility than Company B and will likely require a different insurance program to reflect this uncertainty.
Detailed analysis of ECOR can help a company improve its risk financing and potentially see significant savings on insurance premiums.
Through an ECOR study of its loss history, the company identified data-driven price points and specific changes in its insurance program, which resulted in more than $1 million in savings and a 50% improvement in program efficiency.
ECOR offered in evidence Dillard's own 1996 agreement that says the purchase order "shall bind the seller and shall constitute the entire agreement between Dillard's and seller, which cannot be modified by either party except in writing, executed by both parties or through an EDI Purchase Order Change Document .
ECOR said the 1996 agreement has never been properly amended and remains in place.
Yet, even if the 1997 and 2000 amendments had been adopted by the parties, both versions forbid the oral amendments asserted by Dillard's complaint," ECOR said.