Driving Risk Management objectives requires a clear line of sight across your entire risk ecosystem. And the more risk you have, the more critical it is to get the information you need when you need it.
With various stakeholders in any given risk ecosystem including vendors, carriers, TPAs, brokers, and internal stakeholders such as HR, finance and legal, it is becoming increasingly hard to gather and manage insurance data efficiently and cost effectively.
What’s to blame for all of the delays in consolidating and managing risk management data?
Data Friction – anything that obstructs the flow of information – is what turns a seemingly straightforward process into a costly burden.
So what causes data friction in Risk Management? Here are the 3 things holding your data back:
Disparate technologies. Manually extracting information from numerous sources into meaningful reports that show the true picture of risks and exposures is no easy task. Consolidating and reformatting spreadsheets can add weeks to your processes and leave you open to error. And aggregating data from various business units that each use different systems is time consuming, labor intensive and it takes you away from the higher-value analysis of that information. Your HR system formats data differently than your finance system. Your general liability carrier formats differently than your property carrier. And updates happen at different intervals because of arduous conversions. Tracking data in multiple systems is not only expensive, but it causes problems with workflow, data consistency, and visibility.
Inefficient processes. Manual, inefficient processes inhibit your time to focus on higher-value activities. Perhaps a safety manager has to go back to the office, locate the right form, fill it out, and send it back every time an incident happens. Each step in the process represents an opportunity for the information to be delayed – and for critical details to be forgotten or accidentally omitted. By the time that form finally reaches those who can institute corrective measures, its effectiveness in mitigating future incidents or reducing claim impact may be greatly diminished.
Stakeholders. Competing priorities, opposing goals, and conflicting attitudes can be especially difficult to manage. Your priority as a Risk Manager may be, for example, to collect complete details of all vehicles in the fleet for a renewal. The fleet manager, however, might be busy juggling maintenance schedules. You are going to have to wait until that manager has time to fulfill your request. You are both doing your jobs; it’s just that your immediate priorities are at odds.
Add each additional stakeholder into the equation and the impact of friction increases exponentially. A delay in collecting values, for instance, is relatively easy to deal with in a simple risk ecosystem that includes a single-location company, a broker, and a carrier. But if that delay happens in a more complex ecosystem the impact will ripple through the work done by all of the stakeholders and the cumulative effect on financial, operational, and strategic costs will be substantial.
The resulting data friction caused by disparate technologies, inefficient processes, and stakeholders inhibits productivity, increases costs, and makes every decision riskier because you don’t have the visibility you need.
To learn how you can minimize your data friction, be on the lookout for the next blog post in this series.