Businesses paid about five percent more in 2012 than they did in 2011 to cover the total cost of risk. That compares to a rise of only 1.7 percent in 2011, according to the 2013 Risk & Insurance Management Society (RIMS) Benchmark Survey.
The bigger rise in 2012 largely reflects the influence of hardening insurance market conditions, RIMS said. “While 2012 experienced a reduction in insured catastrophe losses, insurers continued to implement rate increases through the year,” said Jim Blinn, executive vice president of Advisen’s Information and Analytics unit and executive editor of the TCOR survey.
The average TCOR increased from $10.19 per $1,000 of revenue to $10.70.
RIMS officials suggested that the trend seen in 2012 might not last. “Rates are rising but our research shows that improving rates attract new capacity, which makes it difficult to sustain the trend towards progressively higher rates,” said RIMS director Michael D. Phillipus.
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