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The strategies for managing risk include avoidance, control, finance and transfer. By analyzing the frequency and severity of an identified risk, as well as the cost involved with transferring risk—including claims payments, claims handlings costs, insurer margin for running costs, and return on capital—well-designed and -implemented risk technology can help identify the "break- even point" between self-retention and risk transfer, taking into consideration the organization's objectives and risk appetite. In the 2012 Global Risk Technology Survey, respondents were asked to try to quantify savings they have made as a result of using risk technology, such as risk transfer costs in insurance premiums. More than half, 51.2 percent, said that they had realized between 2.5 and 10 percent reduction in these costs. The quality of the data makes all the difference. Since any risk retained by the organization must either be transferred or financed, when transferring risk, the organization must arm its consultants with the best information possible to achieve the optimal deal from the market. A well-embedded RMIS will provide the highest quality data and analytics to obtain the most favorable arrangement. The quality of the data makes the difference… A well- embedded RMIS will provide the highest quality data and analytics to obtain the most favorable arrangement. Risk Financing/Risk Transfer Risk Transfer Costs Savings from Risk Technology Tools Risk Retention Costs Savings from Risk Technology Tools 0.0 Not sure Over 10% Reduction 1 – 2.5% Reduction 2.5 – 5% Reduction 5 – 7.5% Reduction 7.5 – 10% Reduction % 6.8 17.3 8.6 33.3 11.7 18.5 No Reduction Increase in TCOR through transparency 3.7 Not sure Over 10% Reduction 1 – 2.5% Reduction 2.5 – 5% Reduction 5 – 7.5% Reduction 7.5 – 10% Reduction % 18.3 7.8 12.4 7.2 5.2 34.6 12.4 No Reduction 4.6 Increase in TCOR through transparency 32 Global Risk Technology Survey 2012 Aon Risk Solutions | Aon eSolutions