Is total cost of risk even a thing, or is it just a cliche buzzword that insurance salespeople are out there using, trying to make themselves look different in the marketplace? Well, here’s what I’m going to tell you today, if you’re an insurance salesperson, I’m getting ready to rock your world and show you why guys like me take business from you every single day. Stay tuned for the next couple of weeks because the content we’re dropping is all total cost of risk-oriented, and it will change the way you play the game.
Total cost of risk is not a cliche. It’s not some buzzword that people randomly throw out there. It’s a weapon that the best producers in the country use at the point of sale to take business from insurance salespeople. The fact of the matter is if you want to up your game and you want to go to the next level, you have to understand more than policy language and premium. You need to speak to an executive leadership team about inefficiencies in their operation, specifically the risk management function.
Over the next several weeks, I will release a bunch of content, and we are going to dive deep into total cost of risk. Why? Because you need to know it, and you need to understand it. More importantly, when a competitor comes in and takes a piece of business from you and your loyal client leaves and pays 5,000 or 10,000 more in premium to have somebody else represent them, you’re going to have the answer as to why.
So, what’s total cost of risk, what is it? Well, it’s the quantifiable expenses associated with the risk management function of any organization. What are the measurable costs? We’re not going to drill down too far. I’m going to give them to you in a subsequent post, but things like insurance premiums and retained losses are, undoubtedly, some things that come to mind. Indirect costs and claims, things of that nature are also contemplated. Essentially, the total cost of risk is a dollar sign that you can put in front of an amount of money that any organization is spending for their risk management unit.
Some organizations may have a risk manager, guess what? Their salary, that’s part of total cost of risk. They may bring in outside consultants, the money they pay, part of total cost of risk. You need to understand what this is and ask the right questions to get the dollars associated with the various components so that you can quantify that and deliver that in a message to your clients and prospects. So, that they fully understand their costs associated with the risk management function of their business.
If you’re an insurance salesperson, it’s only going to be about premium to you. You’re going to sell on price, and you’re going to die on price. But if you genuinely want to sell on value, if you genuinely want to make a difference in the middle market, and if you’re going to speak music to a CFO’s ears, have those conversations around total cost of risk. And you have my word that I’m going to do everything I can to equip you with the knowledge you need to go out there and do it. If you listen to the upcoming series on total cost of risk, you’re going to kill it in commercial insurance.
Workers’ compensation is one of the most misunderstood and underestimated lines of coverage in the middle market. Too many producers view it as a commodity, something to quote, bind, and move on from. But as the market heads toward 2026, that mindset is becoming a liability.
For years, commercial insurance producers could survive by being good enough across a wide range of industries. They could write a little construction, a little manufacturing, a little hospitality, and a little habitational business and still build a respectable book.
The commercial insurance industry is in the middle of a quiet evolution.
While most conversations still revolve around premiums, deductibles, limits, and carrier appetite, a different category of risk transfer has been gaining traction beneath the surface—parametric insurance. It is not new, but it is finally becoming accessible, relevant, and actionable for middle market producers who are willing to think differently about risk.
In a recent episode of the Power Producers Podcast, I sat down with Brian Thompson from Descartes Underwriting to unpack what parametric insurance actually is, what it is not, and why producers who ignore it may be leaving their clients—and themselves—exposed.
This article breaks that conversation down into practical, producer-friendly language and shows how parametric insurance fits into modern middle market risk management.
The last several years have reshaped the landscape of property insurance across the country. While most national carriers have retreated from coastal states, wildfire zones, and other catastrophe-exposed regions, a handful of disciplined players have taken the opposite path—leaning into difficult markets with a strategic, data-driven approach.
For most entrepreneurs, the decision to start a business is rooted in the promise of freedom. Freedom from a boss, freedom to control income, and freedom to build something meaningful. Yet for many business owners, particularly in service-based industries and middle-market companies, that freedom slowly erodes. What begins as ownership eventually turns into obligation, where the business demands constant attention and the owner becomes the single point of failure.
The insurance industry is full of shortcuts. Some producers look for ways to streamline the quoting process, others avoid hard conversations with clients, and many rely on endorsements or extensions because they are “easier” than diving into the details. Nowhere is this more dangerous than in the world of cyber insurance.
Too many agents assume that a cyber endorsement on a BOP or commercial package policy is “good enough.” It isn’t. In fact, treating a BOP cyber extension as a replacement for a standalone cyber policy leaves clients dangerously exposed, puts producers at risk of losing accounts, and opens the door to costly errors and omissions (E&O) claims.
Cyber threats evolve faster than any other area of risk, and endorsements simply can’t keep up. If producers want to protect their clients and themselves, it’s time to understand why standalone cyber insurance is non-negotiable.
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