Commercial Pricing Edges Downward, says RIMS Book

June 25, 2009

Commercial insurance pricing continued a downward trend in 2008, despite high catastrophe losses and the financial crisis. The average total cost of risk dropped by 9.4% per $1,000 in revenue, reports the 2009 RIMS Benchmark Survey Book. The annual volume  has compiled data on more than 1,300 U.S. and Canadian companies, and this year’s edition includes findings from two new surveys on  Enterprise Risk Management (ERM) and workers’ compensation claims management, along with results from the broker services and remuneration survey.

Among the findings from the surveys: fee-based compensation offers savings over commission-based compensation, while on the workers’ compensation front, 60% of companies have moderate to significant deficiencies in workers’ comp claims management, the book reports.

“Insurance program benchmarking is vitally important for risk managers,” Daniel H. Kugler, a member of RIMS board of directors, said in a joint RIMS-Advisen statement on the 2009 survey book. “But especially in the current economic environment—where every penny counts—risk managers need more information and better tools to control costs, increase efficiency and assure their organizations have state-of-the-art risk management programs.”

The 2009 survey book covers data on 14 industry groups, including energy, telecommunications, banks, government, industrials and non-profits, while its online counterpart covers 66 industry peer groups and over 90 lines of business. For more information, see www.RIMS.org/book.