Annual publication results help insurance buyers compare premiums, limits and retentions
NEW YORK (June 18, 2009) – Economic turmoil and the second worst year on record for insured natural catastrophe losses did not deter falling commercial insurance prices in 2008, according to the 2009 RIMS Benchmark Survey™ book, the annual guide to the cost of risk for commercial insureds in North America. Lower average premiums in almost every line of business contributed to a 9.4 percent drop in average total cost of risk (TCOR) per $1,000 of revenue.
The 2009 RIMS Benchmark Survey™ book 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 1,300 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.
“Risk managers in nearly every industry tracked by the survey saw the average cost of risk fall in 2008,” says Dave Bradford, editor-in-chief of the 2009 RIMS Benchmark Survey™ book and executive vice president at Advisen Ltd. “TCOR is the sum of insurance premiums, retained losses and risk management administrative costs. Of those components, lower average insurance premiums most strongly contributed to the drop in TCOR.”
The 2009 book presents findings from two new surveys on enterprise risk management (ERM) and workers’ compensation claims management. The broker services and remuneration survey, which was introduced last year, provides another look into the relationship of commercial insurance buyers and their brokers. The broker remuneration and workers’ compensation surveys enable risk managers to zero in on key activities that contribute to the cost of risk. In addition, the broker survey finds that compensating agents on a fee basis results in material savings over commission-based compensation. The workers’ compensation survey reveals that approximately 60 percent of companies have moderate to significant deficiencies in workers’ compensation claims management. The ERM survey provides risk managers with an overview of recent developments across all segments of their organizations and highlights areas where risk managers can take leadership roles in ERM implementation and management.
“Insurance program benchmarking is vitally important for risk managers,” says Daniel H. Kugler, ARM, CEBS, CPCU, AIC, ACI, member of RIMS board of directors and assistant treasurer, risk management, at Snap-on, Inc. “But especially in the current economic environment�where every penny counts�risk managers need more information and better tools to control costs, increase efficiency and assure their organizations have state-of-the-art risk management programs.”
The 2009 RIMS Benchmark Survey™ book comprises data collected in 2008 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). The online survey provides an expanded view of the insurance industry, based on 66 pre-defined industry peer groups and more than 90 lines of business. The online survey also permits users to define peer groups for benchmarking purposes based on criteria such as industry, territory and revenue.
About the Risk and Insurance Management Society, Inc
The Risk and Insurance Management Society, Inc. (RIMS) is a not-for-profit organization dedicated to advancing the practice of risk management, a professional discipline that protects physical, financial and human resources. Founded in 1950, RIMS represents more than 4,000 industrial, service, nonprofit, charitable, and governmental entities. The Society serves more than 10,700 risk management professionals around the world. For more information, visit www.RIMS.org.
About RIMS Benchmark Survey™
RIMS Benchmark Survey™ is produced by Advisen, Ltd., which collects and analyzes the data and provides the technology infrastructure for the survey’s online services. Risk managers and buyers of insurance either contribute directly to RIMS Benchmark Survey™ or by using a “data participation letter” to authorize their broker to provide the client’s program details. The letter is available at www.RIMS.org/brokerform.
Risk managers who contribute data to the survey can benchmark the structure of their commercial insurance programs, retained loss costs, exposure demographics and total cost of risk (TCOR) against a highly relevant group of peer companies. Additionally, survey respondents can use software personalized and configured for their needs to view detailed schedules of insurance, programs for current and past years and full-color program tower charts. Both benchmark charts and program charts can be downloaded into any presentation for senior management. The results of the RIMS Benchmark Survey™ are available online or in an annually-published book. Visit www.RIMS.org/benchmark for details.
Well beyond powering the RIMS Benchmark Survey™, Advisen collects and integrates insurance market data and business information for the commercial insurance industry. Advisen also maintains critical risk analytics and time-saving workflow tools for over 530 leading industry firms. Advisen’s specialty is assembling unique insurance market data and creating analytical tools that are too costly for individual insurance entities and purchasers to build and maintain. Over 100,000 professionals rely on Advisen to deliver insights into risk and insurance issues not available from any other source. Advisen is headquartered in New York with offices in London; Kennett Square, PA; and the Philippines.