RMIS-Web Risk & Insurance RMIS Article

Spotlight Report August 11, 1994
Risk Management: Systems & Analysis

Article:: "Glimpse of Near Future Bodes Well for RMIS; Risk Managers Hope for High-Tech Systems Enhancements"
Directory:: 1994 Directory of Risk Management Information Systems Vendors

"Glimpse of Near Future Bodes Well for RMIS; Risk Managers Hope for High-Tech Systems Enhancements"

Business Insurance - August 1, 1994

By Sameera Khan

Every risk manager dreams of a risk management information system that is easy to use, creates a paperless work environment, offers links to internal departments as well as brokers and third-party administrators and provides access to all the information the job requires.

These dreams are about to come true.

By the year 2000 or even sooner, highly sophisticated risk management information systems will be available to U.S. risk managers, featuring almost every function they ever wanted. In fact, RMIS vendors say, keeping up with the new technology will put many a risk manager out of breath. Risk managers will have to upgrade their own skills to take advantage of the latest systems.

Meanwhile, software companies across the country today are conceiving, designing and producing state-of-the-art systems of the future. Each company is trying to outdo the other in creating the ultimate risk management information system.

Most U.S. risk managers say their present systems are useful, but they have a ready list of what more they'd like those systems to do.

Interactive systems are the key. By the year 2000, I would like to see my RMIS interact with other disciplines, systems and other departments of the company like accounting and human resources. The stand-alone system of today is a hindrance,'' said Kenneth Gerrity, risk manager at Genstar Stone Products Co. in Hunt Valley, Md.

Risk management information systems today are so varied that changing insurers, brokers or RMIS vendors often causes problems for user companies. ``In the future, one would like to see a universal network system that the entire industry uses so that if one chooses to change carriers or brokers, the change is not traumatic,'' Mr. Gerrity said.

For Paula Rawleigh, manager-risk insurance at Freeport, Ill.-based consumer products maker Newell Co., the frustrating part of the present-day RMIS is separation of the real-time system from the analysis system. ``It's like having to walk into the same room using two separate doors,'' she explained. While using the analysis system, Ms. Rawleigh has no access to the real-time system where the file notes and payments for the past 24 hours are logged.

A complete RMIS that requires ``no going back and forth'' from one system or function to another is her dream. It should be an RMIS with all software-word processing, graphics or spreadsheets-wrapped in one package.

More effective claims management is the desire of David Mitchell, corporate safety and workers compensation manager at The Pep Boys, a Philadelphia-based automotive component retailer.

The system should give risk managers the ability to see any reserve increase or decrease in claims as they happen in real time, he said. ``Now claims management is a little cumbersome. We have to wait for the end of the month to see changes in claims. If we had the information at that very moment we could change and enforce policy quickly.''

Every risk manager has unique preferences.

For example, Mari-Jo Hill, senior risk analyst in the finance division of SAS Institute Inc. in Cary, N.C., prefers to have a more integrated system that can track detailed information on losses, bring it up to date and do some forecasting.

But, Kenneth Kwidzinski, risk manager at Intel Corp., wants an easy-to-use system that offers flexibility. One should be able to design one's own reports. I'm not in favor of picking out from canned menus,'' he said.

At Hudson's Bay Co. in Toronto, risk manager Kenneth Murphy is envisioning a paperless office. My system supports the strategy I have in my mind, and what I want from it is quick information so that I can make decisions faster after analyzing that information,'' he said.

Mr. Murphy wants an integrated system that gives him online access to the department store company's outlets, third-party administrator and broker.

Right now, our system is not compatible and smooth and one makes do with the limitations, but ideally we want refinement in the whole process of storing and collecting information,'' he said.

Another person tired of digging through files is Bill Johnson, risk financing manager at Hallmark Cards Inc. in Kansas City, Mo. ``There's an explosion of paper. I wish we could just store and retrieve everything from our RMIS, including the insurance policy digests and manuals our broker sends us on a regular basis. One should be able to access something fairly current on a claim quite soon,'' he said.

Risk management information systems as they currently exist perform fairly generalized functions, dealing largely with claims and safety information. What Abdoul R. Sesay, risk manager of construction activities at Los Angeles County Metropolitan Transportation Authority, would like to see is an RMIS that can be tailored to suit the needs of his industry-construction.

About two years ago, the MTA commissioned an outside agency to design a specialized RMIS to conduct pre-construction surveys to assess potential liability. ``In an urban environment that is litigious, one must use urban guerrilla risk management tactics. We used the RMIS as an offense tool to mitigate potential litigation,'' he said.

Mr. Sesay would also like to see an RMIS that can give a detailed analysis of how much is being spent on insurance as the company goes through a project. ``The system should have the capability to compare those costs to costs of the overall project and to similar projects around the country.''

RMIS vendors say what risk managers want will soon be in the market, partly thanks to Windows technology.

Its graphical environment gives flexibility, one can open up multiple claims at same time, one has the ability to move around, have more tools available, tie into E-mail,'' said Ted Burns, director-product development at David Corp., a San Francisco-based RMIS vendor.

David Corp. will introduce a host of Windows-based RMIS products, the first of which, a basic claims processing system, will be introduced by the end of this year.

Risk managers will soon have to build up their skill sets and get acclimatized to the new systems available in the market, particularly the Windows client/server environment, noted Mark Dorn, president of Dorn Technology Group Inc., a software, services and consulting firm in Livonia, Mich.

Dorn Technology has just announced the release of a new Microsoft Windows-based risk management program, Riskmaster/Win, an integrated system that includes seven key modules for claims and policy management, actuarial and ad hoc reporting, graphics, image management and productivity improvement.

Unlike most systems in the 1980s that were topic-specific, did only one type of function, the new system is tied together and run in the client/server mode,'' Mr. Dorn said. ``It can run multiple data bases at the same time, has extensive graphic ability and has a data base feature for litigation management and image processing, besides supporting bench marking.''

Mr. Dorn's system is designed for a multinational business environment. It supports international currency as well as international language and telephone applications, providing access to foreign databases.

The process of integrating systems has begun. Increasingly, systems will shift away from being just loss information systems and become more complete, handling additional losses, financial forecasting and analysis, and cost allocation, said Matthew Carden, director-risk management information services for Travelers Corp. in Hartford, Conn.

A single, integrated system that can be used by every participant on the total cost of risk team-brokers, insurers and clients-is what systems of the future will offer, said Bob Petrie, vp and manager-strategic systems for Johnson & Higgins in New York.

Clients can expect their systems to increasingly perform more tasks. New systems will allow risk managers to compare their risk cost against statistical industry-specific benchmarks, Mr. Petrie said. J&H expects to have a benchmarking product in the market by the end of this year, he said.

Risk management systems of the future will also be able to give more detailed information about the medical component of workers compensation, such as coding and provider information, Mr. Petrie said. To do this, though, third-party administrators need to make information more readily available to software vendors, he said.

David Chzaszcz, director-product development at Corporate Systems Ltd. in Amarillo, Texas, is already preparing for a future where companies will require a different type of executive information system.

By the end of 1995, Corporate Systems will release a new sophisticated Executive Information/Decision Support System that will be graphical in nature. Its output won't be rows and columns of numbers but graphic charts.

The Decision Support System, a modeling tool, will become an important means for risk managers to check net effects of the programs they put into place, Mr. Chzaszcz said.

In the future, CD-ROM will make it easier to manage a claim. It will help in storing more data and in different forms, including voice, image and text, giving risk managers information at their fingertips, he said.

At a later stage, artificial intelligence will also play a role in risk management information systems. That technology will enable the systems themselves to examine and point out certain trends to managers, Mr. Chzaszcz said.

Software vendors worry that in the future, the systems will become commodities as they age and resemble each other. ``What will distinguish them will be the set of services and quality of services that is provided by vendors.''

Business Insurance 1994 Directory of RMIS Vendors

Go To Directory Listing of Vendors Beginning with the letter:

HOW TO USE RMIS VENDOR DIRECTORY

The ninth annual Business Insurance directory of risk management information systems lists companies that produce and supply proprietary software products to corporations in response to their risk management needs. To be listed, organizations must complete and return a BI directory questionnaire. The directory is published as an editorial service; there is no charge for companies to be listed.

The listings are organized by company and begin with the company name and address, the date the organization began offering risk management information systems and the parent company, if applicable.

Information on specific software products follows. Included in the description for each product are the average completely installed price, whether the software is sold with hardware, the type of hardware needed (personal computer, local area network, mainframe or online system) including operating system and memory requirements. Customization options are noted, where applicable. Also included are the year of the first installation, the total number of installations since the product's introduction and the total number of installations in corporate risk management departments. Next are the types of claims or coverages managed by the products and their risk management functions and features.

Following the product summaries is information on continued user support, risk management information system staff figures, new clients who purchased systems in 1993 and the number of those clients who are in risk management departments. Next are 1993 gross revenues and names and titles of principal officers. The names of people to contact at each organization for additional information complete the listings.

Every attempt is made to publish complete and accurate listings. However, BI is unable to verify all information supplied by the participating organizations.