Members weigh the pros and cons of implementing a risk management information system, which aggregates a company’s risk data.
Companies with significant data needs and large teams are turning to risk management information systems (RMIS) to manage an ever-growing list of risks. These tools can offer solutions for corporate risk managers looking to improve processes, manage data and support better decision-making.
- RMIS platforms provide centralized systems to track insurance claims, policies and risk exposures, which can be essential for coordinating across teams and global offices. But companies with a less complex risk profile say it might be more trouble (and cost) than it’s worth.
- That was among the key takeaways at the inaugural meeting of NeuGroup for Insurance and Risk, where some risk managers said they found their RMIS invaluable, while others saw limited benefits, when considering the cost and integration challenges.
A centralized system. Systems like Riskonnect and Origami are frequently cited for their ability to consolidate extensive amounts of risk data in one place, making it accessible and manageable. One member, whose company moved to Riskonnect from a platform provided by their insurance broker, described this centralization as transformative:
- They said, “We moved from a broker system because we didn’t want to be tied to a broker. Initially, we used it for data collection, then the efficiency of it grew. Now we also measure insurance counterparty risk in there and have integrated it with other functional teams around the company.”
- “You need up-front effort. It takes time. But if you invest the time, I would say it’s definitely worth it,” the member added.
Automation opportunities. For many, RMIS platforms also improve operational efficiency, allowing members to automate tasks and focus on strategic work. For example, some companies integrate their RMIS with their ERP systems.
- One risk manager uses Riskonnect to manage their captive insurance program, explaining that it can save considerable time by replacing spreadsheets and manual tracking.
- Another member added, “In my past company, we were with Origami. It was very flexible and transferring data from it was good. It was our system of record for our captive, so that the captive could be audited.”
- “You really need to define what you are going to do with this and why.”
Complexity calculation. However, for smaller teams with simpler needs, a RMIS may not justify the cost. For companies with a more contained footprint and a centralized corporate structure, existing tools like Excel and Smartsheets, combined with direct data access from carriers, may provide sufficient solutions without the high implementation costs.
- One member, whose team had nixed its RMIS because they only use one broker, shared, “We couldn’t find a problem we were solving for. We’re a small team, and we communicate well.”
- The member added, “If we go to a multiple broker model, then maybe a RMIS system makes more sense to manage the information.”
- Integration challenges may also deter some companies from investing in a RMIS. One member said, “Most RMIS platforms don’t connect well with other systems, but some insurtech companies are trying to solve that.”
A middle ground. Alternatives to traditional RMIS may be a middle ground for smaller teams needing centralized data without the extensive setup that a traditional RMIS requires. One newer tool discussed by members, LineSlip, offers a searchable database for risk data and policy management. Like other competitors in the insurtech space, it offers users more control over data access. LineSlip and others in this market, including one called Big Ticket, are using AI in their tools.
- One member with experience with one of these tools warned that “any nuances in insurance policy was a time-suck,” in part, because the AI had difficulty understanding the meaning of policy language.
- That said, another member who had familiarity with the same tool added: “They have built their product out significantly. And it allows you to see your portfolio in one place from wherever you are.”
