Average total cost of risk declined 3.1% in 2009: RIMS

Lower insurance and risk management administrative costs drove a 3.1% decrease in the 2009 average total cost of risk per $1,000 of revenue, according to a survey released last week by the Risk & Insurance Management Society Inc.

The survey data compiled by New York-based Advisen Ltd. is contained in the “2010 RIMS Benchmark Survey.”

The 30th annual edition of the book allows risk managers to compare their total cost of risk and benchmark their insurance programs against data collected from more than 1,400 companies, according to New York-based RIMS.

Survey results also show that workers compensation insurance costs dropped substantially and that the average directors and officers liability 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 executive vp and survey editor-in-chief. “Risk management administrative expenses also were lower. Both were likely influenced by the depressed economy.”

Survey results also show that although risk managers have assumed additional responsibilities in recent years, relatively few are involved in leadership roles in enterprise risk management and supply chain risk management.

The book is available for a fee. For more information, visit www.RIMS.org/book.