Measuring performance is vital to any management process. Since the ultimate costs and results of an insurance program may not be known for years, many risk managers and insurance professionals prefer to compare the performance of their program to industry or historical internal benchmarks. However, even answering the simple question of “How does my program rank compared to others and the past?” can involve a certain complexity that may not be immediately recognized.
A well-engineered benchmark will showcase the value that comes from a sound risk management program and detect areas where additional risk management contribution could enhance the position of the organization or lower insurance costs. Although each insurance program is unique, there is a time-tested approach to benchmarking that can help accomplish these goals.
This article was published by Risk Management Magazine.
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