Empowering unit managers with cost allocation

Our recent post, “How to Tackle Total Cost of Risk (TCOR)”, discussed the roadblocks and best practices to consider when calculating TCOR. It takes cost allocation, however, to realize the benefits of a TCOR program at the unit level. Through a cost allocation model, each unit sees the direct effects of their individual strategies on TCOR at the same time that the overall success of the risk management program is evaluated.
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How to Tackle Total Cost of Risk (TCOR)

tcor, total cost of risk calculation

Total Cost of Risk (TCOR) calculation is, for many organizations, a formidable task. Even agreeing on what the term means can be challenging. The Port of Houston Authority offered a concise yet effective definition in a 2016 presentation at Texas PRIMA, “A metric used to evaluate the success of your risk management process.” This definition underscores how critical TCOR is to understanding the effectiveness of risk management strategies across the entire organization.

The articleTotal Cost of Risk (TCOR) – What Does It Mean to You?” notes that this valuable metric allows organizations to: read more