A risk management information system (RMIS) serves as an insured’s single source of truth for risk and insurance data, helping insureds manage their total cost of risk. The complexity of an insurance program is typically the best indicator for what RMIS functions are needed. Carriers may want to offer tiered levels of service depending on the account sizes they serve.
Pricing and service options, services available for an additional fee, and services and fees applied upon policy cancellation should all be clearly defined for accounts of all sizes. Small and medium enterprises usually need simple, online access that protects confidential data; this includes viewing policies, limits, and deductibles as well as printing certificates of insurance; viewing and downloading a loss run on demand; and reporting claims and viewing the status.
Large companies need these same features. But those with high claims volume, multiple geographies, multiple operating companies, and legacy data may also require dashboards to see trends and understand their programs; alerts; and both inbound and outbound data services, such as providing policy and claims data to the insured’s RMIS provider or feeding employee and exposure data to their carrier.
Large accounts often employ their own RMIS—sometimes these are built in-house, but more often they are built by a third-party provider. An in-house RMIS can create challenges such as data timeliness and variations by carrier and LOB. RMIS providers can make investments that carriers may not be able to, and engaging a third party separates the RMIS software contract from the insurance policies, giving the customer more flexibility at renewal.
Providing an RMIS
Insurers should offer RMIS services based on the needs of their customers. Carriers might provide basic coverage and loss information through a secure web portal. They might offer their own RMIS (proprietary or white-labeled) to customers who might not have one. Or insurers might support their customers’ RMIS by providing the data. These are not mutually exclusive services.
Carriers that provide their own RMIS can build or buy a solution; however, if a carrier doesn’t have a solid RMIS offering, the reasons to buy will probably outweigh the reasons to build. Offering basic RMIS functions to smaller accounts can improve policyholder customer experience and reduce a carrier’s operational/customer service expenses, whereas meeting the RMIS needs of major accounts will improve an insurer’s acquisition and retention results. Empowering an insured with RMIS capabilities can help them lower their cost of risk, which is better for both insured and insurer.
Supporting a Third-Party RMIS
When engaging a third-party RMIS provider, carriers should consider several aspects. Data integration and security are vital. Insurers should have a clear, contractual understanding of what functionality and support will be provided, who owns the data, and who can view the data. SLAs should be in place for system availability and customer service.
Business continuity, security, and disaster recovery should also be covered in the contract. Annual licensing best practices such as caps on increases and inclusion of core advancements should be invoked, and there should be a termination clause that includes continuation of service for a transitional duration.
To have a conversation about trends and experiences in this area, please contact me at [email protected].
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