Too often companies get stuck “making do” with spreadsheets and other outdated risk management tools because, well, that’s the way it’s always been done. Having the right tool makes any job easier — and managing risk is no exception.
New risk technology is challenging the status quo with tools that make managing risk smarter, faster, and more strategic. Do you have what you need to keep up with today’s fast-changing risk landscape?
Your Risk Management Toolkit
Here are the five best tools in a Risk Management Information System (RMIS) that will help you manage insured risks more effectively to ultimately lower your total cost of risk.
Incident Management & Root Cause Analysis.
A single safety incident can be devastating to your organization’s financials and reputation. The key to preventing future disruptions is providing accurate information to those who can investigate, evaluate, and act.
Risk management technology takes incident reporting right to the source so data can be recorded while the event is still fresh. An incident reporting tool records data about every notice and quickly sends accurate information to your investigation team. Consolidated data is accessible anytime, anywhere, by any user, on any device. After a notice has been reported, a root cause analysis tool takes it to the next level by identifying the underlying issues so the team can implement safety measures to prevent future risk.
Collecting current loss exposure information for an insurance renewal is often the bane of a risk manager’s existence. An exposure management tool automates virtually every step involved in collecting values for renewals. Data is entered one time on user-friendly screens to ensure consistency and accuracy. Missing or incomplete information triggers an email reminder to the person responsible.
You receive regular progress reports on what data has been submitted, and any unexpected values are flagged for further investigation. Values also are consolidated to show important changes and trends from year to year. Reports can be generated with one click for better, faster decision-making – and everything is formatted, ready to go with market submissions. The high-quality data might even help during renewal premium negotiations.
Allocating shared costs across an organization can be difficult. So difficult, in fact, that some companies simply divide the total premium cost by sales, payroll, or locations. Or nothing happens and unallocated expenses drag down the entire risk budget.
The truth is, accurate premium allocation matters more than you might think. Holding managers accountable for their own losses can be a powerful motivator to make, for instance, return-to-work and safety initiatives a priority. Accomplishing this appropriately and in a timely manner, however, can be especially challenging for multinational companies with numerous business units. And the stakes are high, often involving millions of dollars in premiums.
A premium allocation tool seamlessly integrates existing data – on claims, policies, locations, etc. – with local business requirements for a tailor-made solution based on actual experience. You can preview different allocation scenarios in advance to determine the best overall result, and the final formulas can be stored and reused in subsequent years for consistency. The reliable and precise structure provided by an allocation tool dramatically increases the credibility and efficiency of premium allocation.
Every carrier and third-party administrator has its own proprietary system for managing claims. Trying to pull all that data into a spreadsheet for analysis can be a major ongoing headache. Working off multiple systems also makes it difficult to track the status of current claims or ensure the right party is being held accountable. In short, things end up falling through the cracks.
A claims management tool gives you one centralized source to manage and analyze claims throughout the entire cycle, from initial submission to final settlement. You can measure TPA and carrier performance to ensure your claims are being handled cost effectively and efficiently. You can also gain insights through analytics that show payments and reserves during the lifetime of the claim, a comparison of like claims based on cause, nature of injury, coverage, loss date, and potential outcomes of your claims.
Policy and Program Management.
Many risk managers struggle to locate the policy language or limits on past or current coverage. Their search often involves digging through paper files, searching their computer, or emailing their broker or carrier. It can be difficult and time-consuming to answer even simple coverage questions or provide proof of coverage when a claim occurred.
A policy management tool provides a quick and easy way to manage insurance policies from all carriers and brokers. All policies are consolidated into coherent, aggregate program charts by period or business line, which can be sorted by layers, limits, deductibles, carriers, and more. You also have visibility into policy erosion and counterparty risk. With policy erosion you can monitor how claims and transactions are eroding your policies and programs and identify claims that could reach a carrier’s limit.
Take Your Insurance Program to the Next Level
Technology used for managing risk needs to be able to keep up with the increasing pressure to turn vast amounts of data into better, faster decisions that will not only manage costs, but strengthen the business. It all comes down to the risk management tools you use.
If you’re bogged down in administrative tasks or limited by data quality, worthwhile results may be out of reach. Adding the right software tools to your kit will set you up to work smarter, make more intelligent decisions, and add more value to your organization.
To learn more about these tools and how a Risk Management Information System could help your business, download the Buyer’s Guide to RMIS, and check out Riskonnect’s RMIS software solution.