Competitive market shows decline in TCOR for second year
New York, NY (Apr. 4, 2016) – Due to declines in property and liability costs and overall risk management costs, businesses paid 2% less in 2015 than they did in 2014 to cover the total cost of risk (TCOR) – according to the 2016 RIMS Benchmark Survey. The Benchmark Survey, produced with Advisen, defines TCOR as the cost of insurance, plus the costs of the losses that are retained, and the administrative costs of the risk management department.
In the survey’s first-ever special chapter examining cyber insurance coverage, it notes that, the total cost of cyber risk for survey respondents was just $0.38 per $1,000 of revenue.
Key findings from this year’s RIMS Benchmark Survey:
- The 2% drop in TCOR was tempered by increases in some categories – driven by a 25% increase in professional liability costs, with management liability and workers’ compensation costs also rising slightly.
- Decreases in insurance premiums have stopped. The survey has shown flat overall premiums at renewal from 2014 to 2015 across most sizes of business and categories of insurance.
- Cyber and transactional insurance emerged as growing niche areas, with Advisen predicting that the cyber sector could double in size to $5 billion by 2020.
- The use of disruptive technologies in the commercial P&C market to power rating models, loss assessment tools, and distribution channels is a considerable force for change in the sector.
Learn more about this year’s findings in the 2016 RIMS Benchmark Survey Webinar, being hosted by Advisen on April 6, 2016 at 1:00 pm EDT.
The annual RIMS survey, produced with Advisen Ltd., is a single source of benchmark statistics with industry data for more than 52,000 insurance programs from 1,457 organizations – including the programs of 197 Fortune 500 companies. It tracks changes in insurance policy renewal prices as reported by North American corporate risk managers.
“The tremendous growth of cyber risks and insurance options drove us to include a new section analyzing the market for cyber insurance. Risk managers will now have greater insight into the marketplace as well as the practices of their peers in purchasing this important coverage,” said Jim Blinn, Executive Vice President and Global Product Manager at Advisen.
“In order to innovate, organizations must first understand the costs, limitations and rewards of each new venture,” said RIMS President Julie Pemberton. “The Benchmark Survey is a highly-informative resource that shows an industry-by-industry breakdown of how organizations allocate funds to hedge specific risks.”
To order a copy of the 2016 RIMS Benchmark Survey, visit www.RIMS.org/book.
Advisen is leading the way to smarter and more efficient risk and insurance communities. Through its information, analytics, ACORD messaging gateway, news, research, and events, Advisen reaches more than 150,000 commercial insurance and risk professionals at 8,000 organizations worldwide. The company was founded in 2000 and is headquartered in New York City, with offices in the US and the UK. Visit www.advisenltd.com to learn more.
As the preeminent organization dedicated to advancing the practice of risk management, RIMS, the Risk Management Society™, is a global not-for-profit organization representing more than 3,500 industrial, service, nonprofit, charitable and government entities throughout the world. Founded in 1950, RIMS brings networking, professional development and education opportunities to its membership of more than 11,000 risk management professionals located in more than 60 countries. For more information on RIMS, visit www.RIMS.org.