Hardening market conditions caused the average total costof risk (TCOR) among 14 industries to surge by five percent in2012, shows the 2013 RIMS Benchmark Survey, produced by AdvisenLtd.

In comparison, the TCOR increase seen in 2011 was only 1.7percent over the prior year.

The annual survey, which includes data about 52,000 insuranceprograms from almost 1,500 organizations, found that mean TCOR rosefrom $10.19 per $1,000 of company revenue in 2011 to $10.70 per$1,000 of revenue in 2012.

Property premiums threw a hefty weight on overall TCOR; theircost of risk grew from $2.92 per $1,000 of revenue to $3.09 per$1,000 of revenue, a nearly six-percent increase within a year.

“While 2012 experienced a reduction in insured catastrophelosses, insurers continued to implement rate increases through theyear” said Jim Blinn, executive vice president of Advisen'sInformation and Analytics unit and executive editor of the survey.“Continued pressure on underwriting results and a low interest rateenvironment motivated underwriting management to seek these higherrates.”

Advisen's review of umbrella and excess pricing and limit datashowed that when prices dropped, insurance buyers tended toincrease their limits; however, when prices increased, buyers wereslower to increase their limits.

“Rates are rising, but our research shows that improving ratesattract new capacity, which makes it difficult to sustain thetrend towards progressively higher rates,” said RIMSBoard Director Michael D. Phillipus. “The wealth ofinformation available in the RIMS Benchmark Survey arms riskpractitioners with powerful industry insight that can help shapetheir understanding of the market and allow them to fulfill theirresponsibilities with greater confidence and clarity.”

The 2013 RIMS Benchmark Survey is available for purchase atwww.RIMS.org/book.