Do you know what your business' TCoR is? What is it costing your organization each year?
TCoR is the amount of net profit your business is giving up by spending it on risk-related expenses. Imagine if the leadership of your company understood that they could improve the organization's bottom line by implementing strategies which would reduce its Total Cost of Risk. You can then look at that number as one of the metrics that gets tracked and managed as part of the business' strategic planning.
“WHAT GETS MEASURED GETS MANAGED!”
We define TCoR as the total cost of your insurance premiums, losses, and, costs for related outside services (attorneys, safety engineers, etc.). TCoR is a quantifiable, controllable number that can be identified and reduced. Companies that implement best risk practices are able to develop strategies to manage each of these costs.
Every dollar saved goes straight to the bottom line. The ALS Group partners with organizations to identify, manage and, ultimately, reduce the costs, herein, increasing their profitability.
Questions to consider:
• Do you use this metric to evaluate how successful your risk management process is?
• Have you benchmarked your TCoR against that of your peers?
• Do you balance retention vs. premiums so that your risk cost is optimized?
• Is this metric something that is included in the performance evaluations of your team or business unit objectives?