2012 RIMS BENCHMARK SURVEY REVEALS MINIMAL INCREASE IN TOTAL COST OF RISK & A NEW FOCUS ON SOCIAL MEDIA RISKS
NEW YORK (June 26, 2012) – Despite expectations that insured losses from natural catastrophes in 2011 would send insurance premiums skyrocketing, the newly released RIMS Benchmark Survey™ indicates that the Total Cost of Risk (TCOR) increased only mildly in the past year. The annual RIMS survey, produced with Advisen LTD, also highlights the value of using TCOR to better track and report on risk management programs, and explores risks impacting individual sectors, including those associated with social media.
Key findings of the 2012 RIMS Benchmark Survey ™:
Average TCOR for all companies increased 1.7 percent, from $10.02 per $1,000 of revenue to $10.19 per $1,000 of revenue.
The contribution of property premiums to Average TCOR grew nearly 9 percent, from $2.73 per $1,000 of revenue to $2.92 per $1,000 of revenue.
About half of risk managers surveyed use TCOR as a tool for benchmarking, reporting to management, assessing risk management department performance or for other related purposes.
As more organizations recognize the benefits of social media for communicating with customers and other stakeholders, 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 & 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 RIMS Board Member Kim Hunton, RF, MPA, FCIP. “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, which contains data contributed by more than 1,000 companies, offers not only a view of the trends impacting risk managers, it provides invaluable benchmarking information enabling insurance buyers to compare their insurance programs against those of similar companies.
The 2012 RIMS Benchmark Survey™ is available for purchase at www.RIMS.org/book. Data contributors receive the book for free; RIMS members who did not contribute data, $599; Non-RIMS members who did not contribute data to this edition pay $899. For questions about ordering, billing or for special pricing for multiple copies, e-mail RIMScore@advisen.com.
About The RIMS Benchmark SurveyTM
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 our “data participation letter” to authorize their broker to provide the client’s program details. The letter is available at www.RIMS.org/brokerform or by calling 800-655-6590. Risk management professionals can also contribute by e-mailing current and prior year policy schedules to Benchmark@RIMS.org. Contributors receive the final RIMS Benchmark Survey ™ at no charge.
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.
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