Carriers are best equipped to help risk managers: speed and integration lead the reasons for choosing a carrier

Risk & Insurance, July, 2003 by Matthew L. Carden

Simply put, insurance carriers are better equipped to provide risk managers with exactly what they need when they need it.

The ability to acquire accurate and timely information is the foremost desire of risk managers. Risk managers increasingly seek information that's fresh and useful. As the source of the data, carriers are best positioned to ensure that as transactions are processed, information is captured completely and accurately. If changes or corrections need to be made, risk managers will see them sooner if the carriers initiate them. When changes are made to the claim file, they will be automatically reflected in the carriers' RMIS system.

Carriers can provide information immediately to a risk manager, or to anyone in the customer's organization, and this is when risk managers find data can be most effective in influencing outcomes and managing costs.

Transferring data to an outside vendor means built-in delays and eliminates the advantage of immediate communication. Why sacrifice that for perceived independence?

Carrier-based systems also offer a more integrated network of risk management functions and information. From a carrier's portal, customers can report a claim, find a network medical provider and be linked directly to the claim file. This information is available for review and follow-up as soon as transactions are completed. As carriers continue to rewrite legacy systems using Web technology, the scope and timeliness of information that can be delivered to customers will continue to expand into policy, loss prevention and billing information areas.

As technology advances, the need to align with a RMIS provider that rides the technology wave is critical. Therefore, risk managers need to know that their carrier or vendor has the financial strength to make a substantial and ongoing investment in product development. The bigger, stronger and broader a carrier becomes, the greater advantage in terms of on-going development. This is an area that risk managers should not neglect when making their RMIS decision.

Always expect superior service from a carrier, compared to that from an IT vendor. A carrier has a much greater stake in ensuring that you receive the best RMIS product with the best service and support. Think about it. If the RMIS experience from your carrier-based system is mediocre it can put that carrier's entire program at risk, not just the revenue generated by the RMIS application. So, a carrier's sense of urgency relative to RMIS service issues should be paramount. And the carrier's support team includes all of the carriers' resources. So you will benefit from access to a full complement of insurance professionals: actuaries, underwriters, claims adjusters, loss prevention engineers and risk management information representatives.

Finally, in the event that a customer chooses to move its insurance program and carrier-based RMIS, it will find that the data is portable. Most carriers have built data transfer processes that have enhanced their ability to export data to either another carrier or an IT vendor.

Carrier systems are going to provide the risk manager with more timely and more accurate information. They are going to integrate different data sources to provide better tools to manage and reduce a customer's costs. At the end of the day, it's that ability to reduce those costs that determines the true value of a risk management information system.

Matthew L. Carden is vice president, RMIS, for Travelers Property Casualty.