The risk management industry certainly had an eventful 2018. As the calendar closes out another year, we’ve picked five prominent trends that may impact your organization in the upcoming year.
1. Increasing Damage from Natural Disasters and Extreme Weather
The 2018 list of major natural disasters is notable for its scope and intensity. From Japan’s flooding and mudslides to California’s wildfires to an unprecedented global heatwave, records for severity and damage were shattered throughout the year. One article noted that, “Nationwide, 8.5 million acres, an area larger than Maryland, have burned this year to date.” Unfortunately, extreme weather and increased natural disasters are becoming more commonplace.
In the article Step up your disaster preparedness, don’t wait for the news report, we discussed how to combine audit technology with weather alerts to develop a preparedness solution that works in real-time and ensures your organization is tested and ready when the next emergency hits.
2. Telematics Emerging in Fleet Management
Consumer adoption of telematics continued at a strong pace, particularly with drivers in the youngest age range, where some studies estimate four in five drivers have telematic-based policies. While the use of telematics to enhance fleet management programs has been underway for some time, the value of this data is becoming more clear.
According to a Verizon Connect report, “The more companies measure, the more improvement they see.” From “harsh driving” to speeding to idling, added data means changing behaviors. “In almost every case, more frequent reporting leads to significant improvement over time. These improvements can translate to a positive impact on worker productivity, accountability and on-the-road behavior, which can drive better customer service, cost reductions, vehicle uptime and operational efficiency.”
In Using RMIS technology in the focus on public entity fleet safety, we discuss how to expand the types of data collected, and gain even greater benefits with an adaptable, flexible system like Origami Risk.
3. Volatility in the Risk Management Information System (RMIS) Marketplace
2018 marks a significant milestone for RMIS systems. As noted in a Business Insurance article that traces the software’s history, RMIS turned 50 this year. As the year comes to a close, the industry looks considerably different than it did upon the article’s publication, let alone 50 years ago. Several notable mergers and acquisitions have upended development paths and introduced uncertainty into the marketplace.
While clients and prospective clients try to sort out the impact of the latest changes, the stream of boastful promises made by RMIS vendors makes the selection process more difficult. As we discussed in the article If they’re all so great, then what’s the difference? Getting to the bottom of promises about expert levels of RMIS service, there are specific key indicators that reveal much more about a vendor’s future promise than claims on a website.
4. New Frameworks Spark an Enterprise Risk Management (ERM) “Great Debate”
Following on the heels of the COSO 2017, the release of the ISO 31000 2018 update led to the spirited debate about relative merits of each framework, including speculation as to which one was “best.” Billed as the “Great Debate,” several prominent figures in the risk management industry shared insights and critiques of the models. The introduction of major updates to the two most widely used ERM frameworks created an opportunity for many organizations to reexamine their ERM practices in the hope of benefiting from updated models.
Our discussion with Michael Yip, Vice President, Risk Management with DFW International Airport, suggested that the debate over which model was the “right” choice may ignore a more fundamental concern. Relating ERM models to the organization’s strategic goals not only ensures relevance and focus, but it also provides a common language with the executive team.
5. Emergence of Automation and Robotic Process Automation (RPA)
Forrester estimates that the robotic process automation (RPA) market, which was only $250 million in 2016, will grow to nearly $3 billion in 2021. With promises of dramatic cost savings and substantial productivity gains, it’s no wonder that RPAs are either operational or in the implementation process at half of the organizations according to a recent Gartner survey.
While risk managers, claims professionals, and insurers are all facing the need to do more with less, RPAs may not be the promised cure-all. Our article Behind the hype of Robotic Process Automation (RPA) — What can it really do? notes that while most large and midsize companies will have at least one process supported by RPA by 2020, one in five will likely abandon the technology. RPAs are fragile and struggle to keep pace with changes to underlying technology. A flexible, cloud-based solution like Origami Risk, however, can offer more stable and functional integrations that can deliver functionality that RPAs cannot.
This year certainly provided advances in technology that can change the way organizations manage risk and face a variety of new challenges. In 2019 Origami Risk will continue to examine industry best practices and offer new ways to improve business processes and drive productivity.