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 =  ?