A measurement of businesses’ total cost of risk (TCOR), primarily used by the insurance industry, declined for the fourth year in a row in 2017, according to The Risk Management Society (RIMS).
Despite record-setting natural catastrophes, the average total cost of risk (TCOR) trended lower for the fourth year in a row — a 3% decrease, according to the newly released 2018 RIMS Benchmark Survey.
TCOR (defined as the total cost of insurance premiums, retained losses [deductibles/uninsured losses], and internal/external risk control costs) decreased from $10.07 per $1,000 of revenue in 2016 to $9.75 per $1,000 of revenue in 2017.
The marginal decline was driven by decreases in property, liability, workers’ compensation, management liability, and professional liability costs, as well as a fall in overall risk management administration costs, RIMS said.
“Market conditions are favorable for insurance buyers,” stated David Bradford, co-founder and chief strategy officer of Advisen. “A competitive insurance market resulting from a chronic overabundance of risk capital strongly contributed to TCOR decreasing steadily since 2013.”
One area bucking the trend of…
