Enter the premium cost ($), the estimated cost of retained losses ($), and the risk management costs ($) into the Total Cost of Risk Calculator. The calculator will evaluate the Total Cost of Risk. Total Cost of Risk Formula The following formula is used to calculate the Total Cost of Risk. TCOR = PC + RL + RMC Variables: • TCOR is the Total Cost of Risk ($)
• PC is the premium cost ($) • RL is the estimated cost of retained losses ($)
• RMC is the risk management costs ($) How to Calculate Total Cost of Risk? The following steps outline how to calculate the Total Cost of Risk. 1. First, determine the premium cost ($).
2. Next, determine the estimated cost of retained losses ($). 3. Next, determine the risk management costs ($).
4. Next, gather the formula from above = TCOR = PC + RL + RMC.
5. Finally, calculate the Total Cost of Risk.
6. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem:

Use the following variables as an example problem to test your knowledge.

premium cost ($) = 500 estimated cost of retained losses ($) = 300

risk management costs (\$) = 1,000

TCOR = PC + RL + RMC =  ?