The total cost of risk for U.S. commercial policyholders fell 9.4% in 2008 compared with 2007, according to the “2009 RIMS Benchmark Survey.”
The cost of risk per $1,000 of revenue for all companies averaged 10.67% in 2008, down from 11.78% in 2007, according to Advisen Ltd., which compiled and analyzed the data for the New York-based Risk & Insurance Management Society Inc.
Even commercial property prices fell despite the fact that 2008 was the second-worst year on record for natural catastrophe losses, according to the survey released Thursday.
But not all costs fell, said Dave Bradford, editor-in-chief of the survey and executive vp of Advisen, a New York-based consultant. Although the cost of risk for nonfinancial institution directors and officers liability insurance fell 9%, the cost of D&O coverage for financial institutions rose about 20%, Mr. Bradford said in an interview.
In general, “we expected to see the cost of risk fall,” Mr. Bradford said. “The market behaved pretty much like we anticipated it would.”
The “2009 RIMS Benchmark Survey” also presents findings from new surveys on enterprise risk management and workers compensation claims management as well as a broker services and remuneration survey, which was introduced last year.
The book, which is based on responses of more than 1,300 companies in the United States and Canada, costs $750 and the online program costs $2,500. Purchase orders are available at www.RIMS.org/book. RIMS members and survey data contributors receive discounts.
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