US RISK COSTS FALL FOR SECOND YEAR: RIMS SURVEY

The total cost of risk (TCOR) faced by US businesses fell by 2% in 2015, marking the second consecutive annual decline, owing to decreases in property and liability costs and overall risk management costs, according to the 2016 RIMS Benchmark Survey. The survey, produced in conjunction with Advisen, defines TCOP as the cost of insurance, plus the costs of retained losses and the administrative costs of a company’s risk management department. The 2016 survey was the first to include a section on cyber cover, where respondents showed the cost of cyber risk at just 38¢ per $1,000 of revenue. However, the RIMS survey also showed cyber and transactional insurance as a fast-growing niche area that could double in size to $5bn by 2020. Despite the 2% reduction in TCOP, the survey also found a 25% increase in professional liability costs, with smaller cost increases in management liability and workers’ compensation. The survey found flat overall premiums at renewal from 2014 to 2015 for most categories of insurance and most sizes of business. The survey includes data from 52,000 insurance programmes at 1,457 organisations, including 197 of the Fortune 500 companies.