Our loss experience is improving. How do I renegotiate my letter of credit?

Your letter of credit may have been calculated using a potentially conservative estimate of losses for past policy periods. You may now have a much better estimate of what the ultimate losses are going to be for the affected periods. You may have also paid down much of that liability.

A loss reserve analysis will give an indication as to what the remaining liabilities should be. There is an extremely good chance that this amount is less than the letter of credit.

The output from a Loss Forecaster reserve analysis is a great place to start negotiating down the letter of credit.