Total Cost of Risk: The Concept
A business may measure their Total Cost of Risk as premiums paid and deductibles incurred on insurance claims.
What time and money does your organization spend on managing your insurance program, negotiating terms and handling claims? Whatever the answer, this view of cost is just a small piece of the bigger picture. Actually, it comprises only a quarter of your business’s Total Cost of Risk.
The bigger consists of the time and resources your organization spends managing losses that are not covered by insurance. By reducing these ambiguous costs, you exert a significant measurable effect on your company’s longevity and success.
In managing a client’s Total Cost of Risk, we look at all aspects of their organization to explore every risk factor, insurable or not, and develop cost-effective business solutions. Partnering with us to reduce your Total Cost of Risk has a quantifiable positive impact on your bottom line.
Many of your risk costs fall outside of insurance premiums. Your ability to reduce these costs will have a greater impact on your bottom line than an insurance program alone. Reducing your Total Cost of Risk begins with identifying time, money and resources allocated to the management of your Risk Profile.
What are your costs?
Insurance & Risk Administration
Retained Losses (Refer to Risk Balance Sheet)
Contractual Assumptions of Risk