Big Businesses See Big Drop in Insurance Costs, Survey Finds
NEW YORK — Big U.S.-based businesses reported a significant decline in their insurance costs last year, the second straight annual drop after a decade of consecutive increases, according to a survey released Sunday.
The 1995 “Cost of Risk Survey,†conducted by the consulting firm Tillinghast-Towers Perrin and the Risk and Insurance Management Society, assesses the total cost of insurance for property, liability and workers’ compensation. It measures the cost against each $1,000 of business revenue. More than 650 respondents participated.
The results show that the average cost of risk decreased 5% between 1993 and 1994 to $7.30 per $1,000 of revenue. Most of the decrease reflected drops in both liability and workers’ compensation costs that offset a large increase in property insurance costs from several natural disasters.
Liability risk financing costs dropped 22% in 1994.
Workers’ compensation risk financing costs fell 18% in 1994.
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