A system is the solution:
is there an RMIS in your future?

By Randy Stimmell, Senior VP, Commercial Insurance
Thilman Filippini

Imagine the following scenario:

Just moments ago, senior management came to you requesting insurance claim and incident data for the past 10 years – and they want it by End Of Day.

What do you do now?

1. Provide management with a cabinet-high pile of dated loss runs from multiple insurers, along with a decade's worth of unsorted internal incident reports – material totaling perhaps hundreds of pages.
2. Frantically gather and sort through this trove of claims and incident data, attempting to manually summarize and display all relevant information, but knowing this is a futile exercise – physically impossible to achieve in a single day.
3. Log-on to your Risk Management Information System (RMIS) and request standard or ad-hoc reports, in summary and detail, with minimal effort. Then go to lunch!
   
   (All your historical and recently-valued data will have been warehoused in the system for precisely this type of immediate retrieval.)

As you might have surmised, Option #3 would be the preferred means of preparing this critical data. An RMIS not only enables you to generate professional reports at virtually a moment's notice, but frees you from the labor-intensive chores of paperwork.

Risk Management Information Systems are available in a variety of formats – from the most basic model which manually captures all insurance claim and incident information … to spreadsheet or database programs … to the most advanced models with automatic loading of insurance claim information and manual input of all other incident information into a risk management software package.

Many insurers and third-party vendors provide RMIS systems. But several considerations come into play:

• With an insurer's proprietary system, the carrier's own claim information is readily available – but what if you have switched insurers in the past, or may switch in the future, or you have additional incidents to track that may never become a claim?
• An insurer's system may not be able to handle other insurer's data and/or permit the manual input of incidents.

Thus in many instances it may be best to consider third-party vendor RMIS systems which have the capability to accept insurance claim information from multiple sources, and enable a risk management professional to manually input any incident information.

In addition to insurance claim and incident information, better RMIS vendors provide modules for capturing exposure data (property values, location data, vehicle schedules, employee information, etc.), OSHA reporting, as well as other information critical to risk management professionals.

With a modular approach, vendors usually will charge incrementally for those modules currently needed by the risk management professional, giving you the option to add modules as required.

In addition to the software licensing costs of an RMIS, whether hosted on your own platform or via an internet connection to a vendor's platform, you can expect to incur charges for:

• initial set-up, training and ongoing customer support;
• data conversion to load insurer claim information into the RMIS system format;
• installation of claims information in a format the RMIS provider will accept;
• any customization that may be required.

No question, a comprehensive RMIS represents a significant capital expenditure, and may only be justified if your organization has an extensive insurance claim and incident count. But if so, a RMIS provides an exceptional performance measurement tool to focus risk control and reduction efforts, as well as dramatically reduce time required to "mine your data" (assuming that your data is readily available).

Thilman Filippini is available to assist your organization in determining whether, and in what form, an RMIS system is appropriate for your current and future needs. Our associates have vast experience in performing initial RMIS feasibility analyses, vendor reviews, assisting with implementation and ongoing consultation.

Please contact us should you desire our consultation.