Rising costs last year for property, liability and workers compensation insurance are major factors in the latest increase in the total cost of risk.

According to the annual RIMS Benchmark Survey released late last month among 1,500 companies surveyed by Advisen Ltd. for the Risk & Insurance Management Society Inc., their total cost of risk increased 2% in 2013 to $10.90 per $1,000 of revenue from $10.70 the previous year.

Moreover, the rise marked the third straight year that the total cost of risk increased (see chart) It peaked in 2004 at $13.91 per $1,000 of revenue after shooting up from its low of $4.83 in 2000.

Rising premiums paid for property, management liability, professional liability and workers compensation insurance were major factors in the 2013 increase.

Jim Blinn, New York-based executive vice president at Advisen, said last year's numbers reflect higher rates insurers imposed in 2013 and 2012 following losses in 2011.

“If you back it up a couple of years to 2012, prices were going up more substantially, particularly in the property area,” Mr. Blinn said. “We saw the last vestiges of those rate increases filter their way through as costs in 2013.”

Stephan Upshaw, Chicago-based vice president of risk management at Equity Residential, said the data reflects conditions he sees in the property and workers comp market, and is a valued gauge of the apartment complex owner and operator's performance vs. peers and a tool to communicate progress to the C-suite.

“At the end of day, total cost of risk is everything,” Mr. Upshaw said. “That's how risk managers are judged.”

Mr. Blinn said the one countervailing factor against increase in the total cost of risk also reflects companies' greater willingness to retain more risk while using internal risk management and mitigation techniques.

“Companies' ability to manage risk has gotten more sophisticated over time, so they are more comfortable assuming risk,” Mr. Blinn said. “It's a sign of the continued maturity of risk management and analytical processes that companies have developed and deployed.”

Ben Fidlow, New York-based global head of core analytics at Willis Group P.L.C., said the increase in the cost of risk was not surprising considering the “natural headwinds” companies face today.

“We broadened the risk bucket because things like cyber risk weren't in there when we calculated TCOR five years ago,” Mr. Fidlow said. “The recognition of risks is now more explicit and driving some of the growth” in cost of risk.

Theresa Bourdon, Columbia, Maryland-based group managing director at Aon Global Risk Consulting, said risk managers need to look at the factors behind the numbers.

“You have to break it down into pieces,” Ms. Bourdon said. “It's a really good thing to measure TCOR, but you have to realize it's one aggregated number and that different parts and lines of the insurance industry are moving in different directions.”

That includes examining trends affecting claims frequency and severity. “If you want to reduce TCOR, you really have to understand what's going on with claims,” she said.

Mr. Fidlow said better use of data and analytics helps risk mangers buy the correct amount of insurance, identify and mitigate factors driving claims, and better manage internal resources.

“Predictive modeling is helping drive claims strategy, which is helping reduce TCOR,” Mr. Fidlow said.