Average total cost of risk dropped 3.1%
The Risk and Insurance Management Society (RIMS) has released its 2010 RIMS Benchmark Survey which shows that the combined impact of lower insurance costs and lower risk management administrative costs led to a 3.1 percent drop in average total cost of risk (TCOR) per $1,000 of revenue in 2009.
Other major conclusions drawn from the survey include that workers compensation insurance costs were down substantially and that the average D&O premium per $1,000 of revenue increased sharply for banks.
“Falling insurance premiums were the largest contributor to lower TCOR in 2009,” said Dave Bradford, Advisen executive vice president and Editor-in-Chief of the Survey. “Risk management administrative expenses also were lower. Both were likely influenced by the depressed economy. The Survey provides risk managers a powerful tool for understanding the various elements of TCOR and for explaining to senior management the impact of economic forces and the insurance pricing cycle on the cost of risk.”
“During the economically uncertain times in which we live, risk managers are under constant pressure to review and improve performance, while doing more with less,” says Robert Cartwright, CRM, member of RIMS board of directors. “It is only through benchmarking that this can be done accurately and we are proud to have been offering this insight to risk managers for the past three decades.”
The 2010 RIMS Benchmark Survey book, the annual guide to the cost of risk for commercial insureds in North America, enables risk managers to compare their TCOR to similar organizations and benchmark their insurance program limits and retentions based on data collected on more than 1,400 companies in the U.S. and Canada.
The book is the annual print summary of the online RIMS Benchmark Survey that is updated daily. Data for the book was compiled and analyzed by Advisen Ltd. for the Risk and Insurance Management Society, Inc. (RIMS). The book is available for a fee of $750 and the online program for a fee of $2,500. Purchase orders are available at www.RIMS.org/book. RIMS members and survey data contributors receive special discounts.
The 2010 RIMS Benchmark Survey book comprises data collected in 2009 and covers 14 high-level industry groups (Energy, Telecommunications, Professional Services, Banks, Consumer Staples, Education, Government/Non-profit, Healthcare, Information Technology, Utilities, Consumer Discretionary, Industrials, Materials and Non-bank Financials).
