Cost of risk declines 3.1%, RIMS Benchmark survey finds

The average total cost of risk (TCOR) per $1,000 of revenue declined 3.1% in 2009, the Risk and Insurance Management Society (RIMS) 2010 Benchmark Survey found.TCOR is an equation that captures the total cost of self-retained losses, risk management administration expenses and insurance premiums, according to Marsh.The survey, produced by Advisen Ltd., also found the average D&O premium per $1,000 of revenue “increased sharply” for banks.”Falling insurance premiums were the largest contributor to lower TCOR in 2009,” said Dave Bradford, Advisen Ltd.’s executive vice president and editor-in-chief of the survey.”Risk management administrative expenses were also lower. Both were likely influenced by the depressed economy.”