In today’s competitive insurance landscape, brokers face immense pressure to secure the widest coverage at the lowest premiums for their clients.  While the cost of premium is certainly a factor, PARTNER RISK believes a more strategic approach exists – one that prioritises the insured client’s Total Cost of Risk (TCOR).

TCOR: A Holistic View of Risk Management

TCOR goes beyond the immediate cost of insurance premiums.  It encompasses the full financial burden a business faces due to unexpected losses. Understanding and minimising TCOR is the key to long-term financial resilience for businesses.  

Here is a breakdown of the key components:

• Retained Costs: These are the first-party losses the insured client retains, including deductibles and any portion of a loss not covered by insurance.
• Risk Control Costs: These are the proactive measures the insured client takes to prevent losses, such as safety training, security systems, and risk management programmes. These represent an investment that can significantly reduce future losses.
• Insurance Premiums: This is the cost to the insured client of transferring some of the risks to an insurance company.

Why Focusing on TCOR Benefits Brokers and their Clients:

The traditional approach of solely focusing on minimising premiums can be a shortsighted strategy for both brokers and their insured clients. Here’s why:

• Limited Coverage: Focusing solely on low premiums might result in policies with exclusions or high deductibles, leaving businesses exposed to significant financial burdens in the event of an insurable loss.
• Reactive Approach: A focus solely on premiums does not address risk prevention. Losses still occur, leading to self-insured costs and potential business disruptions.

• Rising Premiums: The insurance markets fluctuate. Events like natural disasters or industry-wide large claims can lead to increased premiums, negating short-term gains from focusing solely on low upfront premium costs.

PARTNER RISK: Your TCOR Optimisation Partner

PARTNER RISK prioritises the insured client’s long-term well-being.  We partner with brokers to deliver a comprehensive approach that optimises TCOR:

• TCOR Analysis: We conduct a thorough TCOR analysis, identifying areas for improvement in both risk control and risk finance strategies.
• Risk Mitigation Strategies: We work with you to implement proactive risk management practices that reduce the likelihood and severity of losses, ultimately minimising retained costs for your insured clients.
• Cost-Effective Insurance Solutions: As underwriters we design insurance solutions that fill the gaps left by risk mitigation efforts, ensuring optimal coverage at a competitive price.

The Benefits of a Reduced TCOR:

By focusing on TCOR reduction, businesses achieve significant long-term advantages:

• Improved Financial Resilience: Lower retained costs and potentially lower insurance premiums lead to long-term financial stability.
• Enhanced Business Continuity: Minimising losses ensures uninterrupted operations, protecting your client’s revenue stream and brand reputation.
• Proactive Risk Management Culture: A focus on TCOR fosters a culture of risk awareness and prevention within the insured client’s organisation.

Partnering for Sustainable Success

PARTNER RISK Solutions understands the pressures faced by brokers and their clients alike.  We believe in a collaborative approach that prioritises the insured client’s long-term needs.  By focusing on TCOR, we empower you to deliver a more strategic and sustainable risk management solution for our insured clients.