'Cost Of Risk' Hits 10-Year Low

Monday, January 1st, 2001 Risk Management

After predictions of a turn in insurance market conditions following growth in the cost of risk in 1998, the cost of risk ended up going down in 1999—hitting its lowest point of the decade at $5.20 per $1,000 of revenues, falling from $5.71 in 1998. The authors of the "2000 RIMS Benchmark Survey," sponsored by the New York-based Risk and Insurance Management Society, attributed the decrease in the cost of risk in 1999 to fewer retained losses than in 1998. However, with insurance company results continuing to deteriorate—the industry's overall combined operating ratio rose to 97.6 in 1999 from 93 in 1998, its highest point since 1994—pressure to raise rates will increase, the survey's authors contend.

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http://www.nationalunderwriter.com/archives/Pc_archive/2001/P01-01/P200101cost.asp

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