Ventiv Resource Library
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There are four main components of TCOR: • Risk transfer costs – insurance • Risk retention costs – retained losses and claims adjustment • External risk management costs – brokers, consultants and other vendors • Internal risk management costs – staff and related costs In the 2012 survey, 18.5 percent of respondents said that using by RMIS tools they have saved more than 10 percent in risk transfer costs. Additionally, 12.4 percent realized that level of savings in risk retention costs; 13.5 percent saved more than 10 percent in external risk management costs; and finally, 14.0 percent of respondents indicated they saved more than 10 percent in internal risk management costs as a result of using RMIS tools. The survey's findings indicate that, across the board, investments in risk technology have led to overall better management of TCOR. The top ten benefits section of this report illustrates that improvements stemming from risk technology have been significant and widespread due to better management of TCOR. The 2012 survey shows that companies are still keenly driven to gain greater control of their TCOR. When asked to identify the most important drivers over the past two years related to improving risk management information, respondents in the 2012 survey ranked better management of TCOR number one, followed by the need to automate processes and improve risk-related communication. These factors contribute dramatically toward streamlining and improving the ways in which a risk management team operates. Most respondents said that they used their risk technology for measuring factors of TCOR such as: • Risk retention cost, including retained losses/losses within the captive (69.6 percent) • Risk transfer costs, including insurance premiums (65.2 percent) These organizations focused on qualitative risk measurements are dedicated to developing a mature understanding of TCOR. Elements of Total Cost of Risk Measured & Managed Within Risk Technology Tools Internal Risk Management Cost Risk Retention Costs External Risk Management Costs Risk Transfer % 69.6 65.2 39.5 30.1 Global Risk Technology Survey 2012 Aon Risk Solutions | Aon eSolutions 35