Due to declines in property and liability costs and overall risk management costs, businesses paid 2 percent 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.
Key findings from this year’s RIMS Benchmark Survey include:
- The 2 percent drop in TCOR was tempered by increases in some categories—driven by a 25 percent 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.
- 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.
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.