Posts by: John Harper

5 things you’re entitled to from your RMIS

Risk managers looking to move on from spreadsheets or leave the limitations of a legacy system behind know what they want from a new RMIS. But they should also know there are certain things they’re entitled to. Given the size of the investment, as well as the fact that the system will support efforts to prevent losses, control costs, and inform decisions that impact an entire organization, there are—at a minimum—five critical elements that every risk manager should expect from their RMIS platform and service team.

#1 – A transparent, proven RMIS implementation process

RMIS implementations are complex endeavors. Promises of “quick” and “easy” should be taken with a grain of salt. As with IT projects of any size, the potential for unforeseen delays and changes in scope are not uncommon. You deserve to know where you stand throughout the implementation process. In addition to a detailed plan for delivery, the team you work with should also be experienced enough to anticipate and address potential problems, and have a track record of successfully responding to unforeseeable issues.

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What are the switch costs of using legacy systems and spreadsheets to calculate member premiums?

Research shows that multitasking takes a toll on productivity and heightens the likelihood of error. Multitasking: Switching costs, an American Psychological Association article, briefly summarizes academic research on the subject of what takes place when moving back and forth from one task to another, or when performing multiple tasks in quick succession. Although these measurements, or “switch costs,” are relatively infinitesimal–a few tenths of a second per switch–they are compounded when a person repeatedly moves back and forth between tasks. Eventually, these add up to result in a notable amount of wasted time.

According to the article, “multitasking may seem efficient on the surface but may actually take more time in the end and involve more error. [University of Michigan professor David E.] Meyer has said that even brief mental blocks created by shifting between tasks can cost as much as 40 percent of someone’s productive time.” An understanding of these hidden costs can help people select strategies that improve efficiency, “above all, by avoiding multitasking, especially with complex tasks.”

Moving back and forth between legacy systems and spreadsheets in the underwriting process—activities that may have become so routine as to feel like second nature—carries its own switch costs. In this case, the costs come in the form of inefficiency and added risk that impacts both risk pool staff and members.

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Using RMIS technology as a service differentiator

In what is already a competitive landscape, 2018 saw a record number (626) of mergers and acquisitions among insurance brokers. According to Business Insurance reporting, more than half of these deals involved P&C brokers and agents.

At the same time, Earnst & Young’s US and Americas non-life insurance outlook 2019 points out that a “gradual shift toward direct sales can be seen in personal and small commercial lines.” While the report holds that the proliferation of D2C channels that reduce dependency on brokers is unlikely to have a significant impact on large commercial lines in the near future, the trend can and should be taken as a sign of things to come.

“One of the biggest keys to success in this environment is differentiating your agency from others that offer similar services,” writes Mike Lover in the PropertyCasualty 360° article Want to make your customer service truly stand out? Answer these questions.

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Still buried in paper? How a RMIS transforms document management

The challenges that businesses face don’t simply disappear when they cease to be industry buzzwords. For example, articles about the move toward a “paperless office” have, for the most part, been replaced by those covering topics such as AI, robotic process automation, or the use of data from drones, wearables, and the internet of things (IoT). This comes as no surprise. New technology warrants coverage and generates more clicks.

Yet the reality is that many businesses are very much still dealing with paper—desktops, drawers, and box upon boxes upon boxes of paper. Even with the switch from paper to electronic documents, organizations still face bottlenecks in processes related to the handling of critical risk, safety, claims, and policy-related files.

The move from a legacy system to a cloud-based RMIS can help alleviate the burden of managing these paper documents. And while there are many reasons for digitizing paper documents, the real benefits for an organization lie in the potential for breaking free from the constraints and limitations of processes created around paper.

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Data and the value of internal audit

We all want reassurance that the work we do matters—that we’re contributing in a way that matters. Author, consultant, and speaker Norman Marks, in a blog post titled Internal audit needs to perform in a way that matters to the board and top management, puts forth a series of questions that prompt those guiding internal audit to consider whether their efforts actually support leadership’s ability to set and achieve organizational objectives.

“Internal audit can help leaders with assurance that their people, systems, and processes are able to deliver the desired results – and advice and insight on how to improve them further,” Marks writes. “But do we?”

Contributing greater value to the board and top management by serving as a knowledgeable and respected advisor may require a shift in thinking about the role that internal audit plays within the organization. It is also likely to necessitate a change in audit planning and practices. Audits themselves must be seen as a critical component of a more holistic and continuous approach to identifying and analyzing risk, evaluating the effectiveness of controls, and proactively addressing areas of weakness.

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A Stranger is Calling — The impact of RMIS service team turnover

How many members of your current RMIS vendor’s service team have come and gone over the course of your relationship? What about the number of service team leads who have guided support efforts on behalf of you and the other users of your RMIS software?

When you dial into a meeting and get introduced to yet another service team replacement, your RMIS provider is under-delivering.

Many business-to-business software providers place far too much emphasis on “software” and not enough on “service.” In terms of features and functionalities, the results of such an approach may be impressive. But the imbalance comes with a cost. Subpar support is always detrimental to client success.

The importance of consistent, knowledgeable RMIS technology support is difficult to overstate. Given the increasingly complex risks every business faces and the ever-expanding role risk managers play within their organizations, a platform implemented five or more years ago may struggle to keep pace with an organization’s changing needs. A revolving door of service team personnel who need to be brought up to speed on the unique aspects of a RMIS and the risk management program it was put into place to support compounds the problem.

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Partner with legal when selecting RMIS and GRC technology

The responses to a recent Deloitte-commissioned survey of 300 in-house legal executives contain good news for those working closely with in-house legal departments on risk management and compliance-related issues. An executive summary of survey results, Going beyond risk and compliance: Enabling the Legal function to embrace digital transformation, indicates that a majority of respondents feel that in-house legal departments are aware of and open to the use of technology in efforts to make risk management and compliance more efficient and cost-effective.

While there is a willingness to move forward with the use of technology to automate repetitive tasks, improve collaboration, and proactively contribute to the overall strategy of their organizations, there is still work to be done. “Despite encouraging levels of awareness and signs of adaptability, survey respondents have revealed that there is still progress needed before the Legal function fully embraces digital opportunities,” write the study authors. “When they do this, Legal will be able to revamp its approach to risk management and compliance, thus becoming more agile, more integrated and more value-driven, playing an integral role in the delivery of corporate strategy.”

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Make automation matter

It’s not exactly a secret: Regardless of size or industry, every organization stands to benefit from using automation technology to cut down on repetitive, time-consuming administrative tasks. More than simply speeding up a process or getting people to work faster, automating administrative tasks yields value by freeing up employees to focus on the aspects of their job that really matter and provide value.

Automation is wonderful. Except when it isn’t.

As covered in Behind the Hype of Robotic Process Automation (RPA), businesses can run into issues by rushing to reduce costs and improve productivity through automating processes without first evaluating their effectiveness and necessity. The benefits of automating repeatable, administrative tasks can also be lost if automation technology is too difficult to use. The result? Time that could be used performing more high-value activities winds up spent managing software.

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Build a culture of safety — go beyond audits and get employees involved

For risk and safety professionals, the new calendar year brings with it a renewed focus on improving their organization’s culture of safety. Whether looking to put a new safety program in place, make wholesale changes to an existing program, or build upon previous successes, many organizations face the challenge of ensuring that their employees are fully participating in safety efforts.

A recent EHS Today article takes a look at a potential solution for involving people across an organization in this process: safety assessments.

How safety assessments differ from safety audits

To Build Safety Culture, You Must Get People Talking provides an overview of a 2018 Safety Leadership Conference session — “Distracted Drivers R US — Assessment RX for Success” — led by Walter Fluharty, vice president of EHS and organizational development at Ohio-based Simon Roofing.

Where static surveys may be seen as yet another safety-related requirement, focus group-based assessments followed by the completion of self-assessments are more likely to drive engagement and add value.
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Nothing Something will change when your RMIS provider is acquired

Is the sky falling? Or is it clearing? Will the new owners be a breath of fresh air? Or will they turn the business upside down? As a risk manager, you’ll likely hear all sorts of messages from peers, providers, and competitors. Following the acquisition of your risk management information system (RMIS) provider, the only message that matters is this: You have options.

It’s easy to feel as if your hands are tied as you seek answers to questions about what a new, combined company means for you and the users of your current RMIS. Asking questions and voicing any concerns regarding the answers you receive is the surest way to proceed prior to extending your contract.

Perhaps the biggest question—and in some cases, the one that is the most difficult to get an answer to—is whether or not you’ll be forced to migrate to the RMIS of the acquiring vendor.

While migration sometimes means you’ll be gaining access to functionality not available in your current system, the reality is that the move may not be as simple, or as straightforward, as promised.

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