Record high catastrophe losses in 2011 have not caused insurance premiums to skyrocket, according to the “Risk and Insurance Management Society Benchmark Survey,” which finds that the Total Cost of Risk (TCOR) has increased only moderately over the last year.
The annual survey, which was produced with Advisen LTD, also emphasizes the value of using TCOR to track and report on risk management programs and examines the risks effecting individual sectors, including social media.
Highlights from the survey include:
• Average TCOR for all companies increased 1.7 percent, to $10.19 per $1,000 of revenue from $10.02 per $1,000 of revenue.
• The contribution of property premiums to Average TCOR grew nearly 9 percent, to $2.92 per $1,000 of revenue from $2.73 per $1,000 of revenue.
• Half of risk managers surveyed use TCOR as a benchmarking tool, reporting to management, assessing risk management department performance and related purposes.
• A vast majority of risk professionals who participated in the survey believe that social media poses at least a moderate threat to their organizations.
“Globally, 2011 was a near-record year for insured catastrophe losses,” said Dave Bradford, president of Advisen’s research and editorial division and editor-in-chief of the survey. “As a result, the price of property insurance coverage increased for many insureds, especially in catastrophe-exposed areas. This was one of the most significant reasons TCOR grew in 2011.”
“Although organizations have increasingly incorporated risk management practices into their strategic planning, unpredictable natural disasters and emerging risks force underwriters to become increasingly diligent and selective,” said Kim Hunton, RF, MPA, FCIP and RIMS Board Member. “The 2012 RIMS Benchmark Survey explores this and other industry trends while offering a comprehensive risk assessment for many of the major business sectors. The book has truly become an essential resource for today’s risk professional.”
The survey contains data contributed by more than 1,000 companies and offers a view of the trends effecting risk managers and offers benchmarking information enabling insurance buyers to compare their insurance programs against those of similar companies.
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